Malaysia is going to hold the general election soon. From past experiences, some will engage in extreme political rhetoric, rousing unpleasant sentiments towards Singapore to win votes. This may affect our local stock market, so investors should monitor for such developments.
In his tweet on Monday (20 April), Donald Trump accused China and Russia of currency manipulation. But in actual fact, the Renminbi appreciated against the US Dollar over the past year. Trump’s rhetoric sparked concerns that the trade war could take the form of a currency war.
On the US-China trade war front, US President Donald Trump has yet to respond to China’s President Xi Jinping’s show of goodwill. Xi has pledged to slash tariffs on imported cars and promised to open China’s markets. Meanwhile, the market is just adopting a “wait and see” attitude.
On 22 March 2018, Trump signed a memorandum of understanding aiming to slap tariffs on Chinese imports. The presidential memo differs from an executive order, in that it is an instruction to the US Federal Trade Commission to formulate a specific plan to impose tariffs on Chinese goods within 15 days. Upon the announcement of the news, US stocks plunged with the Dow Jones Industrial Average index tumbling 724 points.
Having gone on a free and easy trip to Shantou during the Easter holidays, I realized that I almost couldn’t find any taxis on the road. When I asked passersby where I could find a cab, they answered that taxis were pretty much ruled out of the market, thanks to Didi Chuxing (Didi), the car-sharing mobile application.
The US Treasury Secretary has confirmed that trade negotiations have begun between the US and China. It has been rumoured that the US has asked China to lower its taxes on US imported cars and to open up its financial markets. As this would suit the interests of the US, it is highly likely that this “rumour” is true.
At the time of writing, the Federal Reserve (Fed) has yet to commence its scheduled meeting. In this first meeting chaired by the new Fed Chief Jerome Powell, the federal fund rate would likely see another hike of 25 basis points. Just not long ago, Powell delivered the congressional testimony for the semiannual monetary policy report in which he clearly indicated that the Fed is looking to raise interest rates three to four times in 2018.
The stock market is still undecided on its direction as it continues ebbing up and down. The technical tools for analyzing trends in the stock market are also not perfect.
In the last month of February 2018, US investors were taken on a rollercoaster ride as volatility returned to the stock market.
Before the result announcements of Hutchison Telecommunications Hong Kong Holdings (Hutchison Telecommunications) (215.HK), many were looking forward to the company’s announcement of a special dividend issue at the same time the results were announced. Some investors had hoped that the company would distribute to its shareholders a portion of the HK$14.5 billion made from the sale of its fixed-line network business. But they were disappointed when that did not materialise.