Vietnam Insight

Headline PCE inflation accelerated for the third consecutive month to 4.1% from 3.8%, in line with expectation. US stock futures were little changed on Friday after the major indexes ended mixed in the previous session following volatile trading, as renewed weakness in megacap technology stocks offset optimism driven by a bullish outlook for memory-chip makers. On Thursday, the Nasdaq Composite fell 0.46%, marking its fourth consecutive day of losses, as an early rally sparked by Micron’s upbeat forecast gave way to broad selling across the technology sector. Micron surged 15.7% after reporting strong earnings and issuing a robust revenue outlook for the August quarter, lifting other chip-related stocks including Sandisk (22%), Applied Materials (13.4%), and Western Digital (4.9%). Meanwhile, megacap technology shares remained under pressure, with Apple (-6.1%), Nvidia (-1.6%), Microsoft (-3.5%), Amazon (-3.1%), and Meta (-2.7%) all posting losses. On an annual basis, headline PCE inflation accelerated for a third consecutive month to 4.1% from 3.8%, confirming expectations and marking the highest level since April 2023. Core PCE inflation edged up to 3.4% from 3.3%, also in line with forecasts and reaching its highest level since October 2023.

Accumulating ahead of a breakout. VN-Index closed at 1,863.07 points, down 14.95 points (-0.8%), with trading volume remaining below the 20-session average. Market breadth was negative, with 119 advancers and 177 decliners.On the positive side, TCB, VJC, and HVN were the largest contributors to the index's performance, while BSR, VHM, and VIC exerted the strongest downward pressure. Foreign investors remained net sellers, recording net outflows of approximately VND 1,073 billion, primarily concentrated in VHM, CTG, and FPT.

Trading Strategy: Investors may focus on stocks with sideways consolidation patterns and strong earnings growth rather than concentrating solely on VN-Index fluctuations for medium-term positioning. In the short term, opportunities may emerge in heavily sold off stocks showing signs of recovery, such as insurance, technology, and real estate sectors. Investors should limit the use of margin when the trend is not clearly defined during this period.

Current portfolio: MBB; CTD

Watchlist: HPG, KDH, SSI, Real estate stocks (PDR, NLG, DXG)