We had a short webinar to discuss the possible direction and scenario of the US equity index.
Summary
A “V” shape recovery or the start of a bear market.
Strategies for the 2 different types of scenarios.
Gold as a hedge and its direction.
As we were unable to answer all questions, we have put some unanswered questions in the text box below.
Is it safe to buy XOM shares which is rapidly declining?
XOM may not have reached its bottom as yet. You may want to wait for a reversal of the bearish trend, before entering.
Would bonds be something to invest in as a hedge during the bear market?
Bond is something you can consider but there is risk as well with declining bond price.
Will Singapore banks go much further? What level should we out for?
Depending on V shape recovery or bear market, price can decline further. Our Research analyst has a price target of $25.15 for DBS and $11.98 for OCBC. An important support for DBS lies at $16.70. OCBC is at $8.00
Is there a severe credit crunch in U.S.? Are there any rumour of big US assets managers in trouble?
Not at the moment for both question.
When we short Gold, do we need to pay swaps?
Yes, will need to pay swaps.
We saw rising yields today, why is the yield rising?
Yields move in the opposite direction to bond prices. It means there are bond selling in the market. Why are investors selling bond in this market? There are many bond issues coming up as a result of corporate and government raising money to fight the COVID-19 crisis. It drives bond prices lower and yields higher. Investors may also be disheartened with bond and seeks cash or investors need to raise cash by selling bond as a result of liquidity issues. Rising yields is bad for the economy and could signal a recession.