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- October 2024 Newsletter
October 2024 Newsletter
Market Updates and Top Stock Picks from Singapore & US market
Hello everyone,
As we wrap up Q3 2024, I want to extend my heartfelt thanks for your continued support of our newsletter and team. It’s been an exciting quarter filled with market highs and challenges, and I’m truly grateful for your trust and engagement throughout this journey. Whether you’re a long-time reader or a new supporter, your enthusiasm for staying informed and connected keeps this community thriving. We look forward to bringing you even more valuable insights and opportunities in the months ahead.
Thank you for being a part of this community!
Your No.1 Fan,
Joey Choy
Market Overview
Singapore
Straits Times Index (TradingView)
Straits Times Index (STI) is a market capitalisation weighted index that tracks the performance of the top 30 companies listed on SGX.
Over the past month, expectations of a rate cut have been met with subsequent cuts now coming into effect. As Singapore’s interest rate are generally influenced by the global interest rates, local investors are expecting to head into a lower interest rate environment.
Returns on banks’ fixed deposit and government securities such as T Bills, have already fallen over the year due to expectations of these rate cuts. Safer investment options could see further declines as rate cuts has begun.
Similarly, mortgage rates offered by banks have started to decline as well. Lower rates are expected to benefit Singapore’s market as investors turn to REITs. Local banks, which outperformed last year, may experience a slight decline, but their strong balance sheets should help keep bank stocks stable.
With the 3,600 level broken, turning from a resistance to support, prices looks to be testing multi year highs, with immediate resistance around the 3,700 psychological level.
20d MA swiftly rebounded from the 100d MA late Aug and firmly breaking above the 3,500 level previously are signs that buying pressure was present. Forming another Key support if prices are not able to hold above its immediate 3,600 level.
Hot News (Click to read):
Dow Jones Industrial Average (TradingView)
Dow Jones Industrial Average (DJIA) tracks the daily price movements of 30 large, public-owned blue-chip American companies.
The Dow Jones managed to achieved new highs after breaking above the 41,500 resistance level that it had been previously kept under, swiftly then breaking the 42,000 level with the 3 moving averages (MAs) still trending upward, 43,000 will be the next target for the index.
S&P 500 (TradingView)
S&P 500 Index is a market-capitalization weighted index of the 500 leading companies in the US which is widely considered as one of the best gauge of the US economy.
Similarly, the S&P 500 has consistently reached new highs this year, with the 5,650 - 5,700 resistance level finally breaking, allowing the index to climb higher toward the 5,950 level.
The longer term moving averages indicate that the uptrend remains intact despite near term whipsaw movements depicted by the 20d MA.
Fed Chair Jerome Powell had indicated in his news conference that the Feds are not ruling out further rate cuts, but have also indicated that he will take it “meeting by meeting”.
A cut in interest rates could be seen as a practice to stimulate spending, which will lead to a stronger economy with higher employment and a more competitive job market.
Lower interest rate will also lead to reduced interest payment for businesses, where cash could be freed up to be returned to shareholders.
Hot News (Click to read):
Singapore Stocks Spotlight
DBS (D05.SI)
Target Price: S$42.00
DBS (TradingView)
DBS (1GT System)
No Signal Yet
About DBS Group Holdings Ltd
DBS Group Holdings Ltd engages in retail, small and medium-sized enterprise, corporate, and investment banking services
Operates through the following business segments: Consumer Banking, Wealth Management, Institutional Banking, Treasury Markets
Fundamental
Fee income rose 27% Y-o-Y from Wealth Management, Cards and Loan-related fees, while other non-interest income grew 6% Y-o-Y
Double digit fee income growth will give a further boost to earnings
Q2 2024 AUM grew 24% Y-o-Y to S$396b while interest earning assets rose 20% Y-o-Y to S$447b
Q2 2024 DPS increased 23% Y-o-Y to 54 cents
Technical
Longer term uptrend remains intact as both 100d and 200d MA are still heading up
Price has recently tested the psychological level around 38.00
Next key support level to note around 36.00 where the 100d MA resides
Immediate resistance level appears to be around 40.00, where selling pressure returned in mid Sep
Would not rule out more potential upside towards 42.00 if resistance is firmly broken
ST ENGINEERING (S63.SI)
Target Price: S$5.00
ST Engineering (TradingView)
ST Engineering (1GT System)
1GT Bullish Entry Signal Appeared on 12 Sep 24, No Exit Signal Yet
About ST Engineering Ltd
Singapore Technologies Engineering Ltd provides solutions and services in the aerospace, electronics, land systems, and marine sectors
Operates through the following business segments: Commercial Aerospace, Urban Solutions and Satcom and Defence and Public Security
Fundamental
Record order backlog underpins earnings visibility; double-digit earnings CAGR projected over the medium term
Growth is expected to be driven by growth from TransCore and organic expansion across all business segments, along with strengthening operating margins as they benefit from better pricing and increased operational leverage as well as portfolio high grading, optimisation, and lower cost of funds from FY25
Positioned to achieve revenue growth in the long term
Technical
Uptrend looks firmly intact with all 3 MAs heading up, aligning both short-term & long-term strength
Price is currently retesting the support level around 4.60, which previously was a resistance back in Aug
If price is unable to hold above 4.60, next key support level to note is around 4.40
As long as both 100d & 200d MA are still heading upwards, would not rule out more upside towards first target at 5.00 psychological level
YZJ SHIPBUILDING (BS6.SI)
Target Price: S$3.00
YZJ Shipbldg (TradingView)
YZJ Shipbldg (1GT System)
No Signal Yet
About YZJ Shipbldg
YZJ Shipbuilding is one of the largest and most reputable shipbuilding companies globally, with a strong track record in constructing various types of vessels, including bulk carriers, containerships, and offshore vessels
It operates across multiple segments, including shipbuilding, investments, shipping, and trading
Fundamental
YZJ’s yards are full through 2026 with an orderbook of USD$20.15b, giving rise to growth in the next two years
It successfully made a foray into the LNG carrier market and targets to improve its corporate ESG
Growth could be further boosted by potential orders for large LNG carriers
YZJ is improving corporate governance and pivoting towards cleaner vessels such as dual-fuel containerships and gas carriers, which now account for ~70% of orderbook
Technical
Price has closed below the 2.50 psychological support level, suggesting short-term weakness
However, both longer-term trend (100d and 200d) are still heading upwards, looking positive
Immediate resistance is around 2.75 where sellers returned over the past 3 times since Jul
If price can firmly break and hold above the resistance, would not rule out more upside towards psychological 3.00 level where some selling pressure could return first
United States Stocks Spotlight
META PLATFORMS INC (META.NQ)
Target Price: US$640.00
Meta Platforms Inc (TradingView)
Meta Platforms Inc (1GT System)
1GT Bullish Entry Signal Appeared on 13 Sep 24, No Exit Signal Yet
About Meta Platforms Inc
Meta Platforms, Inc. engages in the development of products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables worldwide
It operates in two segments, Family of Apps and Reality Labs
Fundamental
Meta's investments in AI are driving strong growth, including a 22% revenue increase and a 73% EPS growth
Despite high spending on AI, Meta's ability to generate revenue from AI initiatives offsets some investor concerns
Meta’s AI-driven tools like Advantage+ are boosting advertiser returns, increasing their share of digital advertising spend
While Reality Labs has posted significant losses, it remains a long-term "call option" on the future of VR technology
Technical
Price has recently broke out above the 540 key resistance level, turning it to a new higher support
Note that price has been trading sideways since Feb between the trading range of 440 - 540
Uptrend is still firmly intact as long as price is holding above 540 with all 3 MAs still heading higher
Potential upside target towards 640 based on trading range projection
GRANITE CONSTRUCTION (GVA.NY)
Target Price: US$88.00
Granite Construction (TradingView)
Granite Construction (1GT System)
1GT Bullish Entry Signal Appeared on 12 Sep 24, No Exit Signal Yet
About Granite Construction
Granite Construction operates as an infrastructure contractor and a construction materials company in the United States
Involved in the construction and rehabilitation of roads, pavement preservation, bridges, rail lines, airports, marine ports, dams, reservoirs, aqueducts, infrastructure, and site development for use by the public
Fundamental
Q2 2024 saw revenues up 20%, largely driven by new infrastructure projects, with construction revenues up 22% and materials sales growing by 10%
Company delivered non-GAAP EPS of $1.73, beating estimates by $0.34, and adjusted EBITDA increased from $81m to $130m Y-o-Y
The company has grown both organically and through acquisitions, with the most recent purchase of Dickerson & Bowen, Inc. expected to close in Q3 2024, expanding their materials footprint
Technical
Price has hit our target price of 76.00 as stated in Aug newsletter, with that being the new immediate higher support
All 3 MAs are still heading up indicating uptrend is still intact
Selling pressure has returned near the 82.00 psychological resistance level
As long as price continue holding above 76.00, looking at potential upside target towards 88. 00, once resistance is firmly broken
AMAZON INC (AMZN.NQ)
Target Price: US$220.00
Amazon Inc (TradingView)
Amazon Inc (1GT System)
No Signal Yet
About Amazon Inc
Amazon is a global e-commerce and technology company that engages in the retail sale of consumer products, advertising, and subscription services through online and physical stores
Its core businesses include e-commerce marketplaces, third-party seller services, AWS cloud offerings, digital content/media, and consumer devices like Kindle and Echo
Fundamental
Amazon's net sales increased by 10% Y-o-Y to $148b, with AWS leading the charge with a 19% growth, highlighting the strength in its cloud business
Operating income nearly doubled to $14.7b, driven by North American growth and a turnaround in international operations
Strong cash generation and disciplined spending resulted in a surge in free cash flow to $53b
Amazon raised its full-year guidance, driven by growth in AI, AWS partnerships, and new consumer offerings
Technical
Price has been rallying up since the Aug low and is currently testing the 190 psychological level
To take note of the psychological 200 level as we may see selling pressure returning as seen in Jul
20d MA has also started to cross above the 100d MA, which has bullish implication on the short-term strength
Would not rule out more potential upside towards 220 if price can firmly break and hold above 200
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