Vietnam Insight

Market awaiting the Federal Reserve (Fed) policy meeting, where rates are expected to be left unchanged. US stock futures were little changed on Tuesday after Wall Street kicked off the week on a solid note, as enthusiasm over Anthropic’s planned IPO boosted technology shares ahead of a busy earnings calendar and the Federal Reserve’s policy meeting. During Monday’s regular session, the Dow gained 0.3%, the S&P 500 advanced 0.7% and the Nasdaq Composite climbed 0.8%. The gains came as investors weighed concerns over the heavy borrowing needed to fund artificial intelligence investments. The Fed is widely expected to leave interest rates unchanged, but investors will watch its policy decision and guidance for clues on the possibility of another rate move before year-end. Durable goods orders, consumer confidence and new home sales are also due. Japan’s Nikkei 225 Index dropped 0.8% to close at 62,189 on Monday, entering its third straight week of declines as concerns over the sustainability of massive artificial intelligence spending weighed on sentiment. Investors are now looking to earnings reports from major technology companies this week for further insight into the outlook for AI-related stocks. European stocks started the week higher, with the Euro Stoxx 50 gaining 1% and the broader Stoxx 600 rising 0.8%, as falling oil prices improved sentiment ahead of a busy week of economic releases and central bank decisions. Italy led regional markets with gains exceeding 1%, while Germany, the UK and France advanced between 0.7% and 0.9%. Crude oil fell toward $101 per barrel on Tuesday, extending losses for a second consecutive session as renewed diplomatic efforts in the Middle East raised hopes of preventing a wider escalation of the US-Iran conflict.

Short-term recovery. The market is sharply divided and tends to stall at the MA50 (the 1,780 - 1,800 area) after three consecutive recovery waves. The flat MA50 shows that the main trend is still unclear and trading is mostly sideways. The market could still return to the upper bound of the trading range if the recovery resumes. Support and resistance are at 1,700 and 1,840 respectively.

Trading strategy: Investors should treat the headline index only as a reference when the market is heavily driven by the Vingroup group. In the short term, caution is still advised, but opportunities remain in several groups attracting capital such as exports, real estate, industrial real estate and retail. Risk-averse investors should favor low-beta names with high dividends and low borrowings.

Portfolio: New buy recommendation TCH · Current holding TNG, MWG · Watchlist TCH, HPG, IDC · High-risk names to avoid NVL, PNJ