Global investors appear to be in a “fear of missing out” (FOMO) mode, with strong buying momentum continuing to flow into gold and trendy equities worldwide, despite heightened risks from renewed US-China trade tensions and political uncertainty in the US.
According to Asia Plus Securities (ASPS), global markets remain volatile as trade hostilities between the US and China intensify.
US President Donald Trump recently declared America is now in a full-scale trade war with China, threatening to impose an additional 100% tariff and even cancel the upcoming Apec Summit scheduled for South Korea later this month.
Trump also signalled plans to suspend vegetable oil trade with China, further escalating market concerns.
Adding to the uncertainty, the possibility of a prolonged US government shutdown — potentially lasting more than 25 days — has deepened market caution.
Sentiment remains somewhat buoyed by expectations that US-China trade negotiations could resume, as the US treasury secretary is reportedly preparing to propose a 90-day tariff suspension in exchange for China lifting export restrictions on rare earth minerals.
Markets are pricing in two additional Federal Reserve rate cuts before year-end, while strong third-quarter earnings in multiple sectors provides further support to risk assets.
Among global highlights, LVMH Moët Hennessy Louis Vuitton SE (MC FP) surged more than 12.2% after reporting hefty revenue recently, with Asian sales returning to growth for the first time in six quarters.
Estée Lauder Companies Inc (EL US) showed clear recovery momentum as sales in China rebounded, driven by online channels such as Tmall, Taobao and Douyin, making it the only foreign beauty brand still expanding in the Chinese market. ASPS recommends short-term speculative positions in ESTEE80 depositary receipts.
Domestically, the Bank of Thailand signalled a “cautious policy stance”, prioritising long-term stability over short-term stimulus. As a result, expectations for a December rate cut have eased, while the 10-year Thai government bond yield rose above 1.50%.
Meanwhile, the Thai government is preparing to propose a year-end tourism stimulus package worth up to 20 billion baht in personal tax deductions, including a 1.5-times deduction for travel to secondary cities between Oct 29 and Dec 15. Stocks likely to benefit include The Erawan Group (ERW), Minor International (MINT) and Central Plaza Hotel (CENTEL), according to ASPS.
In terms of market sentiment, global equity sentiment remains firmly in FOMO territory. US margin debt in September surged 6.3% month-on-month to a record high, while volatility as measured by average true range for both US and Thai equities has doubled from the three-month average, noted the brokerage.
Fund inflows have concentrated in hot themes such as gold, silver, mining, semiconductors, renewable energy and healthcare.
Gold prices year-to-date have climbed nearly 60%, the S and P 500 index has gained 15-20%, while the SET index remains down about 8%, recovering from a contraction of 20% earlier in the year.
Monrat Phadungsit, managing director of Land and Houses Fund Management Co, suggested focusing on big trends that will shape the next phase of global growth, especially artificial intelligence, highlighting the space economy, quantum computing, and nuclear energy as standout investment themes.
Meanwhile, Gcap Company Ltd noted gold retains strong bullish momentum, supported by three drivers: escalating trade tensions, US government shutdown risks, and expectations of further Fed rate cuts. The firm recommends maintaining long positions and adding on price dips, with major resistance at US$4,250 an ounce, provided prices hold above $4,000.