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Weekly Summary (7/9/18) – Trade Tensions

Since last Friday, trade war flares again as Trump supported additional tariffs on China goods. In addition, United States and Canada neared a key trade agreement deadline with no apparent resolution though talk between US and Canada resumed this week as Trump seeks a deal in 90 days. Overall, US and Asia market have been bearish since last Friday as investors concern about the US-China trade tension as well as the deal between US and Canada to replace the Nafta agreement. Most of the tech giants are pulling back after a strong climb last week.

For US market, almost all the Tech giants plummeted on Wednesday led by Netflix, causing Nasdaq and S&P 500 to fall as well. Social media companies like Facebook and Twitter including Google were accused by Trump of interfering in 2016 and 2018 elections. In addition, social media giant Facebook’s stock was downgraded from “buy” to “neutral” by Moffett Nathanson based on its view that revenue growth is slowing and that Facebook’s long term profit margin guidance doesn’t provide a case for the stock’s long term outperform. However, I will buy in more Facebook if it continues to drop next week.

Good news is that Amazon reached one trillion market cap as I expected which I mentioned earlier in Weekly Summary (31/8/18) – New High. However, I reduced buying positions in Amazon, expecting for a correction. I bought in more Alibaba after it plummeted more than 6% on Wednesday. One more question is that which company will be the next to reach trillion market cap, Microsoft or Google? Or any other company? I personally will be looking forward to see Microsoft and Alphabet to join Apple and Amazon in near soon.

Despite of bullish news such as investment of more than $1 billion by Facebook to build a new data center in Singapore, its first such facility in Asia, raising of price target of the streaming giant Netflix to $440 from $360 by RBC and forecasting of Apple’s video streaming service as a multibillion-dollar business by Morgan Stanley, the tech giants failed to have a great rebound, pulling back on Thursday after long rally last week. 

Other highly discussed stocks are JD.com and Cronos. JD.com’s CEO, Richard Liu has returned to China, days after being arrested in Minneapolis on suspicion of criminal sexual assault. JD.com’s stock dropped for more than 15% since the accusation and it is in my watchlist. It would be a good entry point, but I would like to keep observing for a few days more. Last week, Cronos evaporated almost 30% after the comments by short seller Andrew Left on Cronos for nondisclosure of the size of distribution agreements with Canadian provinces. CEO of Cronos responded to this accusation with the reason that the company doesn’t want to overpromise. However, the price skyrocketed after the announcement of the partnerships with Ginkgo to develop Lab-Grown Cannabis. In addition, GMP Equity Research raised its stock price target on Cronos by $7 to $17 on Wednesday. I closed the sell position which I held since last week with some profits, day-trading Cronos and managed to earn some profits from the volatility. 
For Asia market, the trade war tension continue to weigh and there is concern about a slowdown in the Chinese economy following the Caixin/Markit Purchasing Manager’s Index for August coming in at its lowest levels in more than a year. Besides, Wall Street’s sell-off of tech stocks dragged down Asia market.
For oil trading, OPEC supply is expected to increase ahead of Iran sanctions which will be fully effective in November. Although evacuation of two oil platforms in Gulf of Mexico in preparation for a hurricane lifted the oil price, the price sank after the hurricane eased. Prices also pulled back from earlier highs after Cushing, Oklahoma, crude oil inventories rose nearly 754,000 barrels though EIA reports on Thursday was bullish. Probably reduced demands since slow-growing of the market due to trade tensions raise investors’ concern as well. Check out my new post on 8 Rules in Oil Trading and 5 Recommended Useful Websites for Trading which would help a lot in oil trading.

Summary of my trading activity:
Reduce: Amazon
Buy: Alibaba
Hold: Facebook, Apple, Netflix, Google, Microsoft, XiaoMi
Day-trading: Cronos
Observe: JD.com, Oil

Sources: CNBC, Investing.com

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