Vietnam Insight

Weaker-than-expected US jobs data reduces expectations for a near-term Fed rate hike. US stock futures slipped on Monday as oil prices extended their gains amid fading hopes for a deal to reopen the Strait of Hormuz, keeping inflation risks and the interest rate outlook in focus. Iran said talks with Oman were approaching an agreement but denied holding direct negotiations with the US, despite Washington’s claims that a deal was close. Investors also turned their attention to key US inflation data due this week after July’s jobs report showed an unexpected contraction, fueling expectations that the Federal Reserve may refrain from raising interest rates. Markets now see around a 44% probability of a 25 basis point rate hike in September, down from 67% a week earlier. On the corporate front, earnings from major AI-related companies, including Applied Materials, Cisco and CoreWeave, are due this week.

Range-Bound Trading with Resistance at 1,800. VN-Index ended the week at 1,768.06 points, up 3.28 points (+0.19%), bringing its total weekly gain to 32 points. Market breadth remained positive, with 164 gainers and 139 decliners. Trading liquidity on HOSE reached approximately 660 million shares, below the 20-session average. Foreign investors recorded a net selling of around VND 90 billion, mainly concentrated in VHM, TCB, and VPB. On the buying side, foreign flows focused on DGW, VNM, and CTG. During the week, the market continued to recover, driven by improved sentiment, news of divestments at various state-owned enterprises, a brightening macroeconomic outlook, and a return to net buying by foreign investors

Trading Strategy: Investors may take advantage of market pullbacks to gradually accumulate positions while maintaining a prudent cash allocation to manage risk and preserve flexibility to increase exposure once a market recovery is confirmed. Investors should avoid using margin to bottom-fish, as the market may still be in the process of forming a second bottom. In addition, technical rebound sessions provide an opportunity to rebalance portfolios by reducing exposure to companies whose business performance has fallen short of expectations.

Current portfolio: LPB, PAN, MBB, POW; Watchlist: HPG, REE, NVL

High-risk stocks to avoid: Real estate (PDR, KDH, NLG), HDG and PNJ