Vietnam Insight

The rally in technology stocks helped offset concerns over rising oil prices and bond yields. US stock futures edged higher on Monday as investors prepared for a busy week of major bank earnings, marking the start of the third-quarter reporting season. JPMorgan, Goldman Sachs, Citigroup and Wells Fargo are scheduled to report on Tuesday, followed by Bank of America and Morgan Stanley on Wednesday. Investors are also awaiting key inflation data, with the September consumer and producer price indexes due on Wednesday and Thursday, respectively. Last week, all three major US stock indexes closed higher as a rally in technology shares helped offset concerns over rising oil prices and bond yields. Meanwhile, energy market concerns resurfaced after President Donald Trump told reporters over the weekend that he was considering joining Saudi Arabia in its campaign against Iran-backed Houthi militants in Yemen following another deadly attack on Riyadh’s international airport.

Range-bound trading with strong market divergence. The VN-Index ended the week at 1,735 points (-2.62 points, -0.15%), with a slight increase in trading liquidity. Retail stocks were the best performers, while technology and personal & household goods continued to decline. Foreign investors recorded unexpectedly heavy net selling in selected stocks, shifting from PNJ last week to MCH this week, with selling concentrated on Friday.

Trading Strategy: We favor defensive stocks with low beta, strong cash flows, high dividend yields, and low leverage in a high-interest-rate environment. The insurance and utilities sectors could be considered. Given the lack of liquidity, the market remains vulnerable to sudden declines, making market pullbacks a more appropriate time to accumulate rather than chase rallies. In addition, investors should focus more on individual sectors and stocks than on the broader index, given the high level of market differentiation.

Current hodling portfolio: REE; Watchlist: TCH BVH, GAS; High risk stocks to avoid: PNJ NVL