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The past month has been kind to the stock market as investors hoped on to a nice lift after the World Cup distraction. August will present a tense period though in terms of market movement. While April’s high beckon tantalisingly, the stock market could fall flat or lose steam as there are not much good news left to propel the rally.
In the short term, bulls have an upper hand in momentum and risk appetite to breach minor resistance at 1120 while bears have to exert themselves strengneously for stock market indices to tumble under the 200-day moving average. In fact, some analysts expect SPX to clear 1180 before a correction.
So far it has been a good second quarter. Earnings have mostly surprised on the upside and it is encouraging to see businesses improve cashflow and repair their weak balance sheets. Huge cash hoards put them in a strong position to expand, reinvest and hire new staff.
On the economic front, things are looking up for Asian countries like Japan, South Korea, Taiwan, thanks to a robust recovery in exports. Singapore forecasted a GDP growth of 13-15% for 2010 and is set to be the world’s fastest growing economy.
This achievement is actually hollow if income levels do not rise in tandem with the cost of living. A steady growth of 3-6% in a Goldilocks environment (not too hot or cold) is better for workers and businesses. There is no point to celebrate a record year of 15% growth if Singapore report a technical recession for the next 2 quarters.
Such a weird combination is not unlikely given Singapore’s open economy which makes it extremely vulnerable to external factors. It was the first Asian country to slip into recession when the financial crisis created pandemonium in 2008. If G20 nations got ahead of themselves on fiscal retrenchment, a global slowdown is inevitable and will hit Singapore badly. Read more...[caption id="attachment_2890" align="alignright" width="150" caption="Photo by > NeoGaboX<"][/caption]
The past month has been kind to the stock market as investors hoped on to a nice lift after the World Cup distraction. August will present a tense period though in terms of market movement. While April’s high beckon tantalisingly, the stock market could fall flat or lose steam as there are not much good news left to propel the rally.
In the short term, bulls have an upper hand in momentum and risk appetite to breach minor resistance at 1120 while bears have to exert themselves strengneously for stock market indices to tumble under the 200-day moving average. In fact, some analysts expect SPX to clear 1180 before a correction.
So far it has been a good second quarter. Earnings have mostly surprised on the upside and it is encouraging to see businesses improve cashflow and repair their weak balance sheets. Huge cash hoards put them in a strong position to expand, reinvest and hire new staff.
On the economic front, things are looking up for Asian countries like Japan, South Korea, Taiwan, thanks to a robust recovery in exports. Singapore forecasted a GDP growth of 13-15% for 2010 and is set to be the world’s fastest growing economy.
This achievement is actually hollow if income levels do not rise in tandem with the cost of living. A steady growth of 3-6% in a Goldilocks environment (not too hot or cold) is better for workers and businesses. There is no point to celebrate a record year of 15% growth if Singapore report a technical recession for the next 2 quarters.
Such a weird combination is not unlikely given Singapore’s open economy which makes it extremely vulnerable to external factors. It was the first Asian country to slip into recession when the financial crisis created pandemonium in 2008. If G20 nations got ahead of themselves on fiscal retrenchment, a global slowdown is inevitable and will hit Singapore badly. Read more...
[/caption]
The past month has been kind to the stock market as investors hoped on to a nice lift after the World Cup distraction. August will present a tense period though in terms of market movement. While April’s high beckon tantalisingly, the stock market could fall flat or lose steam as there are not much good news left to propel the rally.
In the short term, bulls have an upper hand in momentum and risk appetite to breach minor resistance at 1120 while bears have to exert themselves strengneously for stock market indices to tumble under the 200-day moving average. In fact, some analysts expect SPX to clear 1180 before a correction.
So far it has been a good second quarter. Earnings have mostly surprised on the upside and it is encouraging to see businesses improve cashflow and repair their weak balance sheets. Huge cash hoards put them in a strong position to expand, reinvest and hire new staff.
On the economic front, things are looking up for Asian countries like Japan, South Korea, Taiwan, thanks to a robust recovery in exports. Singapore forecasted a GDP growth of 13-15% for 2010 and is set to be the world’s fastest growing economy.
This achievement is actually hollow if income levels do not rise in tandem with the cost of living. A steady growth of 3-6% in a Goldilocks environment (not too hot or cold) is better for workers and businesses. There is no point to celebrate a record year of 15% growth if Singapore report a technical recession for the next 2 quarters.
Such a weird combination is not unlikely given Singapore’s open economy which makes it extremely vulnerable to external factors. It was the first Asian country to slip into recession when the financial crisis created pandemonium in 2008. If G20 nations got ahead of themselves on fiscal retrenchment, a global slowdown is inevitable and will hit Singapore badly. Read more...
