How will the stock market be this new week?
Commenting on stocks this week, the market is gradually regaining balance, investors should consider restructuring their portfolios for medium and long-term investment goals.
After a strong correction session early last week, domestic stock indices have shown a technical recovery as the market received supportive information.
Specifically, the US Department of Labor announced that the number of people applying for unemployment benefits for the first time last week was lower than expected, somewhat erasing concerns about the risk of the US economy falling into recession.
The new data also contrasts with disappointing jobs data last Friday, suggesting the picture of the US economy “is not as weak as the market has been making it out to be late last week and early this week.”
Following the positive news, US stock indexes recorded the strongest increase in 2 years, oil prices increased again, along with US government bond yields recovering to 4%, all of these developments showed that market sentiment has gradually regained balance after the shock last weekend.
Domestically, the market also received supportive information when the second quarter business results of listed enterprises grew beyond forecasts.
According to VNDIRECT Analysis Block, net profit of listed enterprises in the second quarter of 2024 increased by over 20% svck, exceeding the previous market forecast of 5-10%. At the same time, after a strong correction, market valuations also returned to a more attractive level when the P/E of VN-INDEX at one point reached -1 standard deviation, thereby stimulating "bottom-fishing" cash flow to enter the market.
Mr. Dinh Quang Hinh - Head of Macroeconomics & Market Strategy Department, Analysis Division of VNDirect Securities Company said that major stock markets in Asia in the session of August 5 all had negative developments and VN-Index was no exception when it decreased by 3.9% to 1,188.1 points, the lowest since April 23.
“The outlook for the Vietnamese stock market in the medium term from the next 6-12 months thanks to positive business results in Q2/2024 has reinforced our forecast that the overall market profit could grow by 18% this year.” , Mr. Hinh said.
In addition, the scenario of the Fed lowering the operating interest rate 2-3 times from now until the end of the year is gradually becoming real, this will help reduce exchange rate pressure and the State Bank of Vietnam can be more flexible to inject liquidity into the system, especially in the fourth quarter (through the OMO channel and buying USD), thereby helping to maintain the domestic interest rate level at an attractive level to support economic growth.
We still maintain our view that the VN-INDEX may close 2024 at 1,300-1,350 points (baseline scenario) and in the positive scenario (the Fed lowers the operating interest rate as the market expects and the State Bank of Vietnam loosens monetary policy), the VN-INDEX may close above 1,400 points this year.
Therefore, in case the VN-INDEX retests the support zone of 1,200 points, it will be a good opportunity for long-term investors to consider increasing the proportion of stocks and building an investment portfolio for the next 6-12 months.
Source: CafeF
