KLCI Rebounded Strongly This Morning, Is the Bear Gone?

KLCI Rebounded Strongly This Morning, Is the Bear Gone?

17 Sept 2015 -KLCI shot up nearly 40 pts this morning, and managed to sustain at 1680 pts in the morning session. Traders shall hail as the index recovers.

However, long term investors shall remain cautious as global market fundamental remain lackluster. Commodity prices remain low. Companies started retrenchment. Seagate has earlier retrenched near 1000 staffs globally and now HP plans to reduce 33,000 jobs.

Earlier, several banks in Malaysia like CIMB, RHB and Hong Leong has also undergone restructuring and headcount reduction. It seems that businesses are trying to reduce their overhead under difficult market environment. This is definitely a sign to watch out. If the trend of retrenchment persist, it could be an early sign of possible economic recession.

The FOMC meeting outcome is coming out tomorrow. It seemed like today is a speculative recovery as most people are expecting favorable outcome from the meeting. Even if the rate hike is postponed it may not mean the economy is doing fine and market shall cheer. It is just a sign that the US economy is still too vulnerable for a rate hike. Trade cautiously.