Us elections

Biden Triumphs Over Trump! What Sectors/Stocks We’re Looking At Post Election?

Kelwin & Roy Joe Biden , , ,
9th November, 2020, 7:01 AM

Biden Triumphs Over Trump! What Sectors/Stocks We’ll Looking Post Election?

 

It’s been a long and exciting week as we await the election results and finally the results are out!

Joe Biden emerged as the 46th elected President of The United States, ending four tumultuous years under Trump. Is it clear skies now? Not quite yet as we also have to see who makes up the senate and house. Will Biden’s push for more corporate taxes, more regulation, bigger stimulus be pushed through easily?

So what are we expecting?

Quote from Singaporehumblestock 30th Oct

Market has ran up quite a bit since we blogged at the end of Oct . S&P500 was trading around 3230 and we mentioned that it might have been a good time for investors to take some position, scaling into the markets then. Ever since then, S&P500 has risen around 8% so we won’t be surprised that market might have some near term profit taking given the run up.

  1. Democratic President would be deemed more anti-growth and pro-regulation as compared to the Republican President which introduced uncertainty into the market with new policies and agendas.
  2. Biden has proposed higher corporate taxes while Trump says he will maintain low taxes
  3. Market has run up quite a bit so some pullback is not unexpected.

That is one potential scenario that could play out and with any pullback, there might be a chance to scale into the markets again. IF market continues to rally, then enjoy the rally!

So some sectors/stocks we’re looking at!

GOLD! Read up on our previous article which we wrote just 2 weeks back! Gold prices has seen risen and might further given some short term uncertainty and with a fiscal stimulus, inflation could be on the cards and gold is considered a hedge against inflation and currency debasement. Interesting Fact:

Barack Obama was the last Democrat president, and if we will draw a conclusion based on his years in office, one could observe an immediate increase in gold prices right after he assumed presidency.

When Obama took office in January 2009, the gold price was just over $890, and by the end of his first term, the precious metal has risen about 88.6% to $1,685.

Foreign Policy – CHINA! 

In his campaign, Biden says he will counter abusive Chinese economic practices. Biden helped to craft and promote the original Trans-Pacific Partnership trade deal. He now wants to renegotiate certain aspects of that. This suggests that tensions with China will not vanish overnight, even if Biden wins. It will be tricky for Biden to consider immediately lifting existing tariffs without imposing any other measures.

We might see a less harsh stance and erratic approach towards China, a more balanced and level headed policies. Asian equities in general could see some near-term relief, though we do not expect US and China to be best friends overnight but an improvement could be a positive sign.

China big techs are still on our list. Tencent, Alibaba, Meituan, Xiaomi, JD.com are just some that we are looking at.

SMIC ( 981.hk) is a another company that we’re looking at . Under trump’s administration it was under US restriction but could a biden administration ease some of the regulations? IF this happens, SMIC could see some recovery and also China has planning huge investment to develop its domestic semiconductor industry and counter Trump’s administration restriction. SMIC could potentially benefit from this.

Moving on : CLEAN ENERGY, EV & SOLAR POWER! 

Electric cars, clean renewable energy are some of Biden’s new policies and agenda.

The electric vehicle industry has been soaring in 2020.  If elected President, Biden has said that he plans to build more than 500,000 charging stations by 2030, restore the full electric vehicle tax credit, and institute strict regulations that would encourage the use of electric vehicles.

Counters like TESLA, NIO, XPENG could be potential winners!

HAIL (SPDR S&P Kensho Smart Mobility ETF),

PBW  (Invesco WilderHill Clean Energy ETF) ,  

QCLN (First Trust Nasdaq Clean Edge Green Energy) 

SMOG (VanEck Vectors Low Carbon Energy ETF) 

TAN ( Invesco Solar ETF)

2845.hk (Global X China Electric Vehicle ETF)

 are just some of the ETFs that could benefit and have been rising steadily over the last few months.

Technology

Even though Biden has stronger impulse than Trump to break up the Big Tec, with antitrust policies, reform of corporate taxes if senate is not controlled by the democrats then these policies might be harder to pass which could bring relief to them. Short term we might see some uncertainty but it could once again present opportunities for entry. Names like Facebook, Amazon, Alibaba, Alphabet (google), AT&T are on our list.

Stocks with China Exposure 

Stocks like Nike, Estee Lauder could see some relief are these are retail stocks with the highest exposure to China Market. Apple could also be a beneficiary.

Conclusion

Chart Source: macrotrends.net

It’s a lot to digest. In the long term we believe market tends to go up but positioning yourself in the right sector is equally as important. Oil&Gas sector as an example is probably one which we’ll avoid.

Got any questions? Feel Free to drop us a message and we’ll get back to you as soonest. Remember, investment carries risk and so always consult your adviser before making any move!

Have a good week and stay safe!

Yours

Humbly

Kelwin&Roy

 

S&P 500 – [ Crash? Stress? Distress? Let’s Confess, No One Can Predict A Crash, Our Two Cents Worth]

Kelwin & Roy S&P 500 , , , , , , , , ,
30th October, 2020, 7:07 AM

S&P 500 – [ Crash? Stress? Distress? Let’s Confess, No One Can Predict A Crash, Our Two Cents Worth]

Image source: kennofinanical.com

SALE SALE SALE!! haha..nah kidding! Are you worried, stress or unsure of what to do? We’ll just share our two cents worth on the current market and why this time might be a good opportunity to enter the market if you’re investing.

Market is currently jittery with a few possible reasons.

  1. Record number of Covid cases in the US, White house seems to have given up on fighting covid. Lockdowns are happening in Europe, will US also impose lockdowns?
  2. Stimulus Package. As usual, talks and talks about stimulus, delays anticipation all these adds to the volatility.
  3. ELECTIONS! It’s just round the corner! Market gets jittery around this period and volatility ensue.

As we have pointed out a few times, the weeks before election can get bumpy and even on the day itself and the day after as market reacts to the news. But from stats, we can see that regardless of who wins, market tends to go up after all the noise.

Let’s now take a look at the S&P chart to see where it might head to

S&P 500 30th Oct 2020

Chart source: poemsview 30th oct 2020

From a technical point of view, S&P is currently below the 100ema which is not a good sign but no need to panic yet. The next support would be at the 200ema at around 3200 level. Worst case scenario might be to 3132 level. Currently, S&P500 is still considered in an uptrend as the emas have yet to cross. If the 20ema cross the 50ema then the first red flag will come out. A further cross of the 100em would be our second red flag and we’ll really have to re-look at the market then.

For long term investors, this might present some opportunities for entry with a stagger system and not entering by one whole batch. We usually enter around 3-4 batches for one stock. For investing, don’t try to time the bottom as from past experience its almost impossible to do that.  If you’re a firm believe in that markets go up in the long run then you might want to take a look at the markets very soon. ( not all markets ya, be selective! ) We’re eyeing the S&P500! Have your shopping list ready! We have ours! Do you??

We’ll share more of some of the stocks we’re looking at in the next few post! Keep a look out!

Yours

Humbly

Kelwin&Roy

Gold – [ Let’s Talk More About It And Where It Might Be Heading Towards Part 1 ]

Kelwin & Roy Stock Market , , , , , , , ,
27th October, 2020, 7:07 AM

Gold – [ Let’s Talk More About It And Where It Might Be Heading Towards Part 1 ]

Chart Source: Poemsview 27th Oct 2020

GOLD! I’m sure most of us are not stranger to that word and have some interest in it. Gold is generally consider a safe-haven asset whenever markets are volatile and uncertain. The demand for gold is usually driven by market instability. We can see how much gold has risen ever since covid-19 hit causing one of the greatest rally in gold. Gold usually has a negative correlation to other assets like stocks and bonds but in recent times are we see US market trend up, gold has been on a steady climb. So remember to watch the charts and not just listen or read information without looking at the charts.

So are we too late into the gold rush? Let’s take a look at the charts to help us answer that. Currently gold is in a consolidation. With a lower support at around $1850 and and upper range of around $1931. Its below its 20 & 50ema of around $1907 so moving up above it is a first positive sign. It is also slightly below the short term uptrend line but regaining its foot above it at around $1914 would be another positive sign.

Biden and gold. So what will happen if Biden wins the US election? His plan for a huge stimulus might see gold prices moving up. Bigger stimulus might cause a weaker USD in the near term and has money is being pumped into the system inflation might start to creep in. Gold is usually a hedge for these events and we might even see gold retesting the high of $2000.

Next question would be how to invest in gold? We’ll cover some ways to invest in gold in our next blog post so stay tune!

Meanwhile, keeping a close watch on gold.

Yours

Humbly

Kelwin&Roy

US Markets And The Upcoming Election In Nov

Kelwin & Roy Stock Market
1st October, 2020, 6:24 PM

Image source: express.co.uk

As we all know by now that the US election is just about 5 weeks away and the heat is on as 3rd Nov draws closer.  As we all witnessed the president’s debate yesterday which turned out to be a  more of a bickering session where both people hurled insults and repeatedly interrupted each other. One would probably get very little out of yesterday’s debate other than some entertainment value.

At a point in time Mr Biden even called Mr Trump a “clown” and told him to “shut up” and Mr Trump questioned Biden’s intelligence. What a debate!

Issues like handling covid19, racism were hardly rationally debated as both kept on squabbling that the debate moderator had to intervene.

Market couldn’t get much out of the debate and futures started to sell down after that only to recover on news of stimulus.

For now polls show Mr Biden leading and Trump has probably has to take the rest of the debate seriously in order to swing votes to his side.

Now what can we expect from now till Nov? VOLATILITY! As the race to the white house is not conclusive yet, both parties stand a good chance to win. As such, market could swing during this period so do be aware. As Trump is pro market, pro business if he’s firmly in the lead, markets could favour that. On the other hand, if Biden is in the lead, market might not like it as they will have to adjust to a new president, new policies and more regulations.  Election news might overtake covid news for the time being as traders shift their focus for the time being.

-So for short term traders, do be nimble, adjust your expectations during this period. Don’t be greedy during this time or stay out when it’s too uncertain.  Gold could also be a trading idea as some might flock to there for safety.

-For longer term investors, take the chance to position yourself during the dip on strong companies with good fundamentals.  In the long run, market tends to move up. Index ETFs are good alternatives if single stock exposure is not your cup of tea.

So what happens if Donald Trump wins? 

  1. As trump favours deregulation, low interest rates environment, low tax rates so those industries like financials, traditional energy , military (Lockheed Martin) and healthcare like GSK and Pfizer might benefit.
  2. Sector to avoid would probably be some China tech that Trump has aimed. As there is uncertainty in Trump’s policy on the trade war and it might be better to avoid those companies with China exposure or manufacturing in China as these companies might suffer from the tariffs
  3. We might see some certainty in the markets as Trump is pro markets and always credits himself for how the market has performed. S&P has made an all time high despite Covid, got to give it to this man. Traders are also used to Trump’s way with the exception of an increased post election trade escalation and of course his famous tweets.

So what happens if Joe Biden wins? 

  1. As Biden is more for tax hikes, regulations or some even say anti-growth, this might take a hit to the markets. Plus the fact it’s a new President and markets dislike uncertainty.
  2.  Biden is also more for renewable , sustainable energy, infrastructure and manufacturing. He focus on environmental issues so companies related to clean/renewable energy like solar could benefit.
  3. Financials could be affected due to more regulations and tax  hikes.
  4. Although Biden’s trade war stance is not as erratic as Trump’s he had not committed to removing the tariffs.

It’ll be an interesting month leading up to the elections so stay tune as we update more on index in the coming days. Stay tune.

Yours

Humbly

Kelwin&Roy