Week 07_Trade war 2.0

GLOBAL STOCK MARKETS 
The U.S. stock market remains resilient amid macroeconomic and tariff news
After falling midweek due to weak CPI data, U.S. stocks quickly rebounded following news that President Trump signed an order imposing countervailing tariffs on foreign countries—though these tariffs are not immediately effective. Beyond the impact of macro data and the earnings announcement season, the tariff news has become the focal point and has had a significant effect on market movements.
- U.S. stock indices maintained an average increase of 1.7%; EU600 rose by 1.9%, Nikkei 225 by 1.0%, and CSI 300 by 1.2%.
- The commodity index was up 1.9%, gas prices surged by 12%, and metals continued a strong upward trend—with precious metals (Gold +2.6%, Silver +4.4%) and base metals (Copper +5.1%, Zinc +3.1%) leading the way; agricultural products (Sugar +4.3%, Coffee +5.5%).
- The DXY index fell by 1.1% while the U.S. 10-year treasury yield increased by 0.05%.
Speaking before a Congressional hearing, the Fed Chair noted that the overall U.S. economy remains robust with a strong labor market. Inflation has cooled but still exceeds the 2% target. Under current conditions, Powell stated that the Fed is in no hurry to ease monetary policy. The federal funds rate, currently between 4.25% and 4.5%, is providing flexibility. Subsequent January CPI data, which showed a 0.5% increase and pushed inflation to 3%, further supports the expectation that the Fed will hold rates steady—possibly through the summer—after having reduced the standard lending rate by 1% in the latter half of 2024.
Items to watch in the coming week include: Japanese GDP; Chinese 1- and 5-year interest rates; monetary policy rates and minutes from the Reserve Bank of Australia and New Zealand; CPI figures for Canada and the UK; unemployment benefit applications; PMI and FOMC policy minutes; PMI data from the UK, EU, and the U.S.; as well as an extraordinary session of the Vietnamese National Assembly.

VIETNAM STOCK MARKET
VN-Index increased slightly, extending its four-week gain streak
VN-Index rose by 0.1%, thanks to a weekend up session with a 5% improvement in liquidity. The index increased by 0.8% along with a 13% rise in liquidity.
- After three weeks of gains by large-cap stocks, capital flows have shifted to mid- and small-cap stocks across various sectors. Besides the hot stocks, there is a rapid rotation among sectors.
- The breadth of advancing stocks narrowed, with gains in only 8 out of 18 sectors. The Insurance, Construction & Materials, and Chemicals sectors gradually advanced by 0.9–6%, while the Retail, Basic Resources, and Personal & Household Goods sectors declined by 2.4–5%.
- Foreign investors reduced their net selling to USD 74 million, following net sales of USD 166 million the previous week.
The 9th extraordinary session of the 15th National Assembly took place from February 12 to 19, reviewing and passing the Law on Amending the Organization of the National Assembly, the Government, and Local Authorities, and on Promulgating Legal Documents; as well as resolutions on reorganizing the state apparatus and restructuring the National Assembly and the Government. In addition, the National Assembly reviewed decisions on setting an economic growth target of at least 8%, piloting special mechanisms and policies for the development of urban rail in Hanoi and Ho Chi Minh City, the Lao Cai – Hanoi – Haiphong rail, and the mechanism for constructing the Ninh Thuan nuclear project. The laws and policies passed in this session serve as the basis for streamlining the state apparatus and implementing key national projects.
We maintain our view from last week, believing that investors should consider locking in profits on individual stocks that have surged, while maintaining a reasonable portfolio allocation, as the VN-Index is nearing a short-term peak, cash flows remain stagnant, and the mid-term market trend is still unclear.