Asia Colour

Chinese stocks continue to move lower today after yesterday’s disappointing press conference from state planners. The China A50 Index is down another 7% today and down 17% from the recent highs. The lack of a fiscal stimulus is weighing heavily on investor sentiment.

US equities however, remain unaffected by developments in Asia. US equities continue to push for new highs despite US election uncertainty and pricing out cuts in 2024 following the NFP report. Bond markets are now pricing in 2 cuts in 2024, down from 3 cuts just a week ago.

The consistent grind higher in US equities despite growing headwinds from the Middle East and domestic challenges related to the US elections, reaffirms our view that risk assets are poised to rally.

In the crypto market, we’ve seen the meme coin market surge with increased trading activity both on-chain and off-chain. There is some froth in the market as traders capitalize and leverage heavily on the latest hippo or cat narrative.

Perp funding across Deribit and Binance have increased in the past 2 weeks also, a sign that bearish bets are decreasing or longs are building. This, combined with the froth in memecoins makes us wary of moves to the downside, as these often happen when markets are bullish and least expect it.

Trade Idea

We look to continue accumulating even in the face of short-term uncertainty and dips, given the bullish medium-term outlook.

We prefer Accumulators as they allow us to keep buying at discounts, and risk-off selloffs from US election uncertainty should be short-lived.

ACCUMULATOR

• Expiry: 29NOV24
• Settlement Frequency: Weekly from 11OCT24
• Strike: 58,800
• Barrier: 70,000
• Spot ref: 62,100