Week 35_FTSE Vietnam Index and MarketVector Vietnam Local Index Portfolio Forecast for Q3/2024_20240826

Global Stock Market:
The stock market's rally has slowed as investors await the Federal Reserve Chair's perspective at the Jackson Hole conference.
The minutes from the July FOMC meeting had bolstered market confidence in a potential rate cut by the Fed in September. However, the rally has stalled as bond yields rise, and investors await new guidance from the Fed Chair. The stock market maintained its upward trend for the week, while commodities and the DXY declined.
- U.S. stocks increased by an average of 0.5%, EU600 +2.1%, Nikkei 225 +0.9%, and CSI 300 -0.5%.
- The commodities index fell by 0.8%, mainly due to declines in oil (-2.9%), gas (-3.9%), and gold (-0.6%).
- The DXY index dropped by 0.9%, and U.S. 10-year Treasuries decreased slightly by -0.03%.
The July FOMC meeting minutes revealed that most members expected data to continue as anticipated, making a policy easing in the next meeting appropriate. Officials are confident that inflation is sustainably moving toward the 2% target, though some concerns remain about the labor market. The minutes indicated that the Fed signaled a possible rate cut in September. This perspective will be reinforced by the Fed Chair's speech at Jackson Hole over the weekend.
Key data to watch for the upcoming week includes the U.S. consumer confidence index, second-quarter GDP revision, and unemployment claims; Japan's CPI; China's PMI; and CPI, unemployment rate in the EU, and Vietnam's macroeconomic data.

Vietnam Stock Market:
The VN-Index is approaching the peak level for 2024.
The upward trend continues, with the VN-Index recording its second consecutive week of gains, rising by 2.6%, and liquidity increasing by 21% compared to the previous week.
- Bank stocks contributed 55% of the market's overall increase, helping the VN-Index break through the 1,260-point resistance level and reinforcing the short-term recovery trend.
- The market advanced broadly with all 18 sectors showing gains. The personal goods, financial services, and retail sectors each increased by over 6%.
- Foreign investors were net sellers of $25 million, compared to a net purchase of $45 million the previous week.
The market is returning to its yearly peak. Investors might accelerate trading activities, consider partial profit-taking, and buy back shares during market fluctuations.
Following the Fed's signals regarding potential rate cuts, the DXY has decreased by nearly 5% over the past two months. Previously, exchange rates were a challenge for central banks, including Vietnam. The DXY's decline is providing the State Bank of Vietnam (SBV) with more policy space to lower OMO and treasury bill interest rates to support credit growth. The persistent drop in the black-market USD exchange rate, coupled with an increase in the bank USD rate, indicates that commercial banks might be increasing their USD purchases. The SBV also has an opportunity to rebuild its foreign exchange reserves after intervening in the second quarter to stabilize the exchange rate.