US Still In The Cloud Nine After Earnings Season

After the corporate earnings season, and the FBM KLCI hitting the resistance along
1,559 last week, profit taking activities have emerged after the MSCI rebalancing
activities. Meanwhile, on Wall Street, the 3 major indices have surged again; the
S&P500 rose towards new highs after the Core PCE data came in within expectations
and investors were focusing on the AI trend and sustainable earnings going forward.
We believe the positive sentiment may spillover towards stocks on the local front
this week. On the commodity market, the Brent oil price turned higher above
USD83/bbl ahead of the OPEC meeting this week, while the Gold price has
experienced a solid breakout above USD2050 after softer factory sector output.

Sectors focus: This week, we expect traders to look at the commodities sectors after
a firmer trend on Brent oil and Gold prices; the O&G may continue to charge higher,
while Gold-related stocks may trend positively this week. Also, the Plantation sector
may ride higher in tandem with the FCPO price hitting the RM4000 range. Meanwhile,
we like the Furniture sector in view of the weak ringgit position – LIIHEN’s
prospective dividend yield stood more than 6%.

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