Just a quick market view. couple of events to look at.
1. Spain bailout. Before Spain requested bailout, markets were in panic mode to urge for Spain to request bailout. Now EU has officially approved of the bailout to release to Spain. However, markets still uneasy with news on Spain bailout. Reason being now they are looking at whether Spain need a full bailout or not ? Full or partial bailout the fact remain Spain needs the bailout !!!. Should market over-react to the Spain's bailout, that is a buy opportunity when there is panic selling.
2. Greece back in the news again. This time the Torika will examine whether Greece can meet the requirement to get the next bailout fund. Should Greece fails, no bailout fund release, in September Greece will default/bankrupt and that rise the issue of Greece could leave Euro. Now a recap, just now month before Greece re-election, almost every countries were working on contingency plan on possible Greece default and leave the Euro. With that in mind, why the market still react to the news ? This is something need to think about and should market just take an excuse to sell it down, another buying opportunity.
3. China latest flash PMI for July released by HSBC just yesterday came in 49.8, still in contraction but rebounded from past months thereby indicating the 2 rounds of monetary easing is taking effect. Just weeks ago, Premier Wen Jiabao mentioned China economy rebound still yet to stabilize and given these events, China should be launching some more stimulus along the way until the recovery can see some sustainability. Remember China's stimulus program will not be like those in 2008 and expect a global stock markets rally. China has changed its economy model to consumer/service orientated, a very much different from the very export orientated model in 2008. Hence any stimulus will only benefit selective sector. Furthermore, China will not want to enact the high inflation phase again so aggressive stimulus can be ruled out. Nevertheless, Singapore should benefit from China recovery. Those are not bad news actually coming out from China lately. A good proxy to tap into China consumer market will be those expose to consumer/services companies like CapMallsAsia, CapitaRChina etc..... ( Not inducing to buy on those stocks but give an example )
4. Some might have noticed S-Reits have been performing very strongly for past 1 months. The dividend yield has dropped like 1% if compared with June. Also, some of the S-Reits went XD recently still holding up well with the price. ( theoretically after XD, price should drop the amount equal to the dividend ). This is something NEED TO MONITOR as that will give you the clue of what the funds are doing. Firstly, global interest rate are at very low level, bond yields also depressed until they have become not attractive at all. Needless to say bank interest rate, putting money inside basically earn you nothing. Fund managers with lot of cash on hands should be parking the money with those S-Reits or high-yield stocks and build a base around there for their portfolio. This has implication. Should after until September, the prices of the S-Reits still holding up well, this should indicate that currently funds are not distributing to sell off. With a base firmly build around the high-yield stocks, their next target will switch to the higher beta stocks and pump them up. This is one option that could happen. Many think S-Reit and defensive stocks are very boring as prices seldom move but if you are meticulous enough, the movement of the S-Reits and high-yield stocks can tell you the direction of the market or in layman term, the movement of the fund managers.
5. Do keep the option open that there will be a deep correction coming and probably bottom in December and that will be another chance to get it should you missed last Oct and this Jun bottom. Reason for the deep correction is none other than coming from US.
