M+ Morning Market Buzz - 5 Aug 24

Dow Jones: 39,737.26 pts (-610.71pts, -1.51%)
⬆️ Resistance:  42100
⬇️ Support:  38600

FBM KLCI: 1,611.05 pts (-13.20pts, -0.81%)
⬆️ Resistance:  1670
⬇️ Support:  1580

HSI Index: 16,945.51 pts (-359.45pts, -2.08%)
⬆️ Resistance:  17800
⬇️ Support:  16600

Crude Palm Oil: RM3,917 (+RM47, +1.21%)
⬆️ Resistance:  4040
⬇️ Support:  3770

Brent Oil: $76.81 (-$2.71, -3.41%)
⬆️ Resistance:  83.50
⬇️ Support:  74.90

Gold: $2,443.24 (-$3.02, -0.12%)
⬆️ Resistance:  2530
⬇️ Support:  2330

M+ Market update – 5 Aug 24
Recession Fears Persisted

Last Friday, selling pressure picked up on the local front following the negative performance on Wall Street. A huge sell-down was noticed in the broader market, where only about 10.5% of stocks traded higher. Meanwhile, the US stock markets further declined with a weaker jobs report, triggering the Sahm Rule and raising concerns over a potential economic recession. The Dow fell below 40,000, while the Nasdaq dropped more than 2.4%. This week, traders will be watching the ISM Services PMI and unemployment claims on Thursday. In the commodity markets, Brent oil dropped more than 3% to near the support level of USD76, while the gold price trended near USD2,440 and the CPO price rebounded off the RM3,850 zone.

Sectors Focus: With the weak trading performance in the US stock markets, we believe there might be a spillover of selling pressure into the local market, impacting the Technology sector. However, we think it might be an accumulation phase for the Construction, Building Materials, Property, and Utilities sectors amid the infrastructure and data center catalysts leading into the earnings season. Additionally, traders may look into gold-related stocks in anticipation of an interest rate downcycle environment. Besides, the Financial segment could be attracting foreign funds at this juncture. 

Stocks to watch: 

Gold-related: *POHKONG*, *TOMEI*, YXPM
Financial: AFFIN, *CIMB*
Plastic-related: *GESHEN*
Utilities: KJTS, *RANHILL* 
Building Material: ENGTEX

Source: M+

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