Following the bullish engulfing last week on the FBM KLCI, the buying support
continued within selected Telecommunication heavyweights; lifted the KLCI higher
for the second session. Meanwhile, with the Fed’s Chair Jerome Powell offered
optimism on the progress that the US central bank’s 2% inflation target is well on
track, the Dow & S&P500 surged to highest close in 2023, with the market looking at
a peak of interest rate and looking for rate cut potential in 2024. This week, we expect
traders to focus on the (i) ISM Services PMI, (ii) jobs data such as unemployment
claims, unemployment rate, non-farm payroll. On the commodity markets, the Brent
oil prices traded below USD80/bbl with as traders were not convinced by the
additional voluntary cuts from OPEC+ members, while the gold price surged towards
all-time-high at on the back of rate cut optimism.
Sector focus: We expect the investors to re-assess and trade the companies with
positive growth in earnings following the November reporting season. We favour the
Poultry sector, specifically the egg segment as traders could be waiting for the
upliftment of egg’s ceiling price. Also, in view of the strong gold price, the gold
retailing stocks could be favourable to trade. Meanwhile, with the Brent oil prices
declining, traders may be avoiding in the near term.