Vietnam Insight

Higher rate-cut expectations. US stock futures held steady on Tuesday after the major jumped in the previous session on the back of tech gains, driven largely by renewed hopes of a Federal Reserve interest rate cut. In regular trading on Monday, the Dow rose 0.44%, the S&P 500 gained 1.55% and the Nasdaq Composite climbed 2.69%. Megacap tech names outperformed, with Broadcom surging 11.1% on revived AI infrastructure momentum and Alphabet jumping 6.3% as Gemini 3-related developments pushed its market value above Microsoft. Tesla also advanced 6.8% after Elon Musk flagged progress on next generation AI chips. Meanwhile, dovish remarks from Fed officials bolstered expectations for a December rate cut, with markets pricing in an 81% chance of a 25 basis point move, up sharply from 42.4% a week earlier. Fed Governor Christopher Waller signaled support for a cut next month, echoing comments from San Francisco Fed President Mary Daly and New York Fed President John Williams.

Return to the sideways range of 1,600-1,700. VNINDEX increased slightly, closing at 1,667.98 (+13.05 points, +0.79%) with liquidity remaining lower than the 20-session average. The market had 123 gainers and 186 losers. The stocks that contributed the most to the index's increase were VIC, VHM and VNM; the stocks that hindered the market were STB, HPG and GAS. Foreign investors net sold VND1,152 billion. VRE and VHM were the most net sold.

Trading Strategy: Trading-oriented investors can monitor the market's reaction around the 1,650-1,700 range. If the index does not drop out of the sideway channel during corrective sessions (which is currently showing these signs), this could be a good opportunity for this type of investor to re-enter the market. Medium- and long-term investors can begin partially disbursing capital into stocks with strong business results and attractive enough discounts, such as the banking, financial, and construction materials sectors.