Trade Radar | Does It Make Sense To You? Wall Street Soared After Rising Geopolitical Tension?
Another Weekly Session with Loui, M+ Online Head of Research.
What happened? Over the weekend, there is an escalation of geopolitical risk, following the Israeli-Palestinian conflict. It may have spooked most of the traders as crude oil and gold prices shot up with the appetite of safe haven assets increased significantly.
What was the expectation? Given the rising tension, we saw the Dow futures were down in the morning more than 200 points, but when the market opened in the US on Monday…
What was the outcome?…bargain hunting quickly emerged and the narrative has switched from focusing on geopolitical tension towards focusing on economic data and dovish Federal Reserve comments.
What benefited? We believe the energy-related and defense industry were having a significant push following the incident amid rising crude oil price and higher demand for defense equipment.
How can you position under this environment? Firstly, investors will first look for safe-haven assets, hence utilities and high cash position companies with stable yield will be favorable. Meanwhile, the energy stocks and defense sector will be on traders' radar.
| Stock Code | Company | Sector | Last Closing (USD) | Current Market Cap (USD 'bn) | 1-month Total Return (%) |
| OXY $Occidental Petroleum Corporation OXY$ | Occidental Petroleum Corp | Energy | 64.18 | 56.78 | -1.69 |
| SLB $Schlumberger NV SLB$ | Schlumberger NV | Energy | 58.24 | 82.77 | -3.21 |
| GOLD $Barrick Gold Corp. GOLD$ | Barrick Gold Corp | Precious Metal | 14.85 | 26.07 | -5.89 |
| LMT $Lockheed Martin Corporation LMT$ | Lockheed Martin Corp | Aerospace & Defense | 436.53 | 109.93 | 3.18 |
| RTX $RAYTHEON TECHNOLOGIES CORPORATION RTX$ | RTX Corp | Aerospace & Defense | 72.99 | 106.24 | -12.57 |
(Source: Bloomberg)
More about Loui:
Loui Low leads a team of analysts to perform equity and economic research and to provide investment advisory services to the organization's sales team, fund manager and retail fraternity. He has more than 10 years of experience in the stockbroking industry.
He graduated with a Bachelor of Science in Statistics from University of Malaya. He also holds an STA Diploma and is a member of the Society of Technical Analysts (MSTA) United Kingdom.
More about the Trade Radar:
Trade Radar is a weekly-updated section, featuring Loui's latest insights into market trends and hot topics. Traders may find some trading inspiration from Loui's views.
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