Vietnam Insight

Reduce the probability of a Fed rate cut in December to around 50%. US stock futures stabilized on Friday after the major averages sold off in the previous session, as the boost from the US government reopening was outweighed by lingering concerns about stretched AI valuations and uncertainty over the Federal Reserve’s interest rate trajectory. In regular trading on Thursday, the Dow fell 1.65%, the S&P 500 dropped 1.66% and the Nasdaq Composite declined 2.29%, with all three benchmarks posting their worst day since the October 10 selloff. Megacap tech names led the decline, with Tesla, Nvidia, AMD, Palantir, Broadcom and Oracle losing between 3.6% to 6.6%, as investors remain cautious about a sharp rise in debt financing and surging AI capex plans. Markets have also cut the probability of a December 25 basis point cut to about 50% from nearly 95% a month ago as several Fed officials signaled caution over further easing amid persistent inflation and gaps in official data following the government shutdown.

Return to the sideways range of 1,600-1,700. VNINDEX moved sideways after a strong recovery session, closing at 1,631.44 (-0.42 points, -0.03%) with liquidity remaining lower than the 20-session average. The market had 268 gainers and 58 losers. The stocks that contributed the most to the index's increase were VNM, GEE and DGC; the stocks that hindered the market were STB, HPG and VHM. Foreign investors net sold VND987 billion. The stocks with the strongest net sales were STB and VCI (over VND600 billion). On the contrary, VNM, FPT and TCB were net bought the most.

Trading Strategy: For Traders: It is advisable to limit transactions and wait for signs of renewed buying demand to emerge and for the market to form a new price base. For Medium- to Long-Term Investors: They may begin to partially disburse capital into stock groups with solid business results and a sufficiently attractive valuation discount such as those in the banking, finance, and construction materials sectors....