Daily Market Report (16 Aug 2019)
- We reckon the financial markets will continue to remain volatile over the next few weeks. Meanwhile we reiterate that a recession is not going to happen anytime soon, but we may see a slowdown.
- As Wall Street is still trending at a premium, it is not surprising that funds are liquidating their holdings in view of a potential slowdown. The Dow Jones Industrial Average PER now hovering at 16.7x (FY19), above its 10-year average of 15.7x plus a potential downgrade on FY20 earnings.
- Therefore, we may see a continued flight to safety out of equities to other asset class like bonds and gold. Yesterday gold price hit a 6-year high at US$1,530.
- We just need to ride out the prevailing uncertainty and continue to advocate Buy on Weakness.
