Taiwan stocks returned to the Wanwu level at the end of July, but under the influence of tensions in the Taiwan Strait, they have weakened again. KGI Investment Advisor put forward 4 reasons today (3) to point out that although Taiwan stocks still need to face the Taiwan Strait in the next half month The crisis and the bad stress test in the earnings season, but the market risk appetite has improved, which will support the index to go down. We are optimistic that this year’s strong rebound is coming, and investors are advised to deploy in batches when the stock price is pulled back.
The latest research report released by KGI Investments pointed out that the catalyst for the rebound of the market from the end of the third quarter to the fourth quarter of this year came from four factors, including (1) Apple’s start of the stocking cycle, (2) The corporate earnings report entered an empty window cycle, (3) ) The Fed will enter a cycle of slowing rate hikes, and (4) pessimism among investors has entered a trough cycle.
According to a KGI Investment Consulting survey, the end of the third quarter coincided with the beginning of a large number of stockings of Apple’s iPhone 14. It is estimated that the stocking volume of the supply chain will maintain the level of about 85 million units last year, which is one of the few items with order resilience this year. The valuation is at the bottom of the 10 times price-earnings ratio, and the peak season effect will support the market.
At the same time, after mid-August, when the financial report enters a window period, the market will also take a break for actions such as downward revision of corporate profits or downgrades.
On the other hand, Fed Chairman Powell recently released a dovish signal at the FOMC meeting. The latest market expectation is that the remaining 3 FOMC meetings (September, November, December) will raise interest rates by 2 yards and 1 respectively before the end of this year. Compared with the 3-yard rate hikes in June and July, the rate of interest rate hikes will be significantly slower, which will help reduce the willingness of international funds to continue to sell Asian stocks, and may even sell to buy.
KGI Investment also mentioned that the confidence index of domestic investors in investing in stocks in the next six months has dropped to a historical low. Looking back at the data of previous years, when the confidence index fell below 50, the cumulative investment rate of back-end stocks in 3 months could reach 6 on average. % and 13% after 6 months.
Therefore, KGI Investments advises investors to take advantage of the bearishness to suppress the stock market and make a downward layout, and is optimistic about the sub-industries with relatively resilient demand such as Apple, cloud/data center, automotive electronics, and green energy.