Banks, consumer staples and healthcare are IG's top picks ahead of Fed meeting
By PC Lee / theedgemarkets.com | Marc
SINGAPORE (March 15): The upcoming meeting of the US Federal Reserve is expected to drive the stock markets this week, Bernard Aw, market strategist with IG says.
There is a consensus in the market that the Federal Open Market Committee — the Fed’s rate-setting panel — is not going to raise interest rates when it meets on Wednesday.
“Uncertainty drives volatility. Lack of uncertainty on the US Fed move augurs well for the market," he told The Wall Street Journal.
Singapore banking stocks — DBS, Oversea-Chinese Banking Corp and United Overseas Bank — should do well if the Fed affirms expectations and avoids a rate rise this week, but signals that future hikes are in the works, says Aw.
His top sector picks are consumer staple stocks and the healthcare industry, which he views as solid defensive picks in a challenging business climate.