Vietnam Insight

An 89% probability that the Fed will cut interest rates by 25 basis points next week. US stock futures held steady on Wednesday after the major averages advanced in the previous session as risk appetite returned to the markets. On Tuesday, the Dow rose 0.39%, the S&P 500 gained 0.25% and the Nasdaq Composite climbed 0.59%. A rebound in Bitcoin helped lift sentiment, while investors assessed the potential for a year-end rally given December’s typically strong performance. Markets are pricing an 89% chance that the Federal Reserve will cut interest rates by 25 basis points next week. Attention now turns to the ADP employment report for November for fresh insight into labor market conditions. In corporate news, Marvell Technology jumped nearly 10% in extended trading after delivering solid Q3 results and forecasting strong data center revenue for next fiscal year. American Eagle Outfitters also surged 10% on expectations of robust holiday sales.

Testing the upper bound of the 1,600–1,700 sideways range. VNINDEX closed at 1,717.06 (+15.39 points, +0.90%) with liquidity around the average of the last 20 sessions. The market had 135 gainers and 178 losers. The stocks that contributed the most to the index's increase were VIC, VJC and TCB; the stocks that hindered the market were VPB, LPB and REE. Foreign investors net bought VND637 billion. VJC, VIC and TCB were the most net bought.

Trading Strategy: Investors need to be selective in choosing stocks, as the VNINDEX is being heavily influenced by movements in the VIC group. Medium- and long-term investors can start gradually disbursing into sectors with solid earnings and attractive valuations, such as banking, financial services, and construction materials. Short-term investors can focus on stocks showing improving liquidity and prices, such as utilities, industrial parks, and technology… Based on historical data, the percentage of stocks trading above their MA50 (50-day Moving Average) around the 30-40% range often signals a market bottom. Currently, this index stands at (39% - implying that many stocks have been deeply discounted).