May 30 – June 3 | Investment Opportunities in Asia this Week?

It’s been a rough few weeks, but we could see a recovery in the financial markets by the summer, according to one report on MarketWatch. Let’s see if we can kick things off with a positive start in June! 

Whatever happens, the markets will probably remain volatile as we head into the summer months. This week, we’ll take a look at the economic situation in Europe and Asia. We’ll also get ahead of the upcoming results for US software company Salesforce.

Spotlight on economic data in Asia

Did you know that it’s possible to invest in emerging markets and, in particular, Asian markets with BUX Zero? Indeed, we offer many ETFs that allow you to invest in a diversified basket of stocks from the region.

This week, many countries in eastern and south-eastern regions of Asia are preparing to release some important economic data. And it could present an opportunity for some of the ETFs on BUX Zero. Let’s take a look.

  • India will release its GDP growth figures for the first quarter on Tuesday, May 31. While the country has been strongly affected by the recent health crisis, economic growth remains very high. The economy grew by 8.2% for the full economic year of 2021/2022. Which ETF to watch this week when the data is released? India ETF (Lyxor).
  • Japan will also reveal various economic data points this week. First up, the country’s unemployment rate on Monday May 30, followed by consumer confidence on Tuesday May 31, and manufacturing PMI for May on Wednesday June 1. Joe Biden recently visited Japan and is hoping to strengthen US economic co-operation in the region through the IPEF (Indo-Pacific Economic Framework for Prosperity). Which ETF to watch? Japan MSCI ETF (iShares).
  • India and Vietnam are also in the spotlight as Apple prepares to move some of its production away from China. This could create a new ‘production hub’ and relieve some of the pressure on global supply chains. With the zero Covid policy implemented in China, many factories are shut down or idling! Which ETF to watch? Asia Ex Japan MSCI ETF (Xtrackers).
  • Meanwhile, many countries in Southeast Asia are finally opening their borders to unvaccinated travelers, such as Thailand and Indonesia. The region relies heavily on tourism so this could give the entire economy a boost. Which ETF to watch? Emerging Markets Asia ETF (Xtrackers).

Salesforce: opportunity after the drop?

After a 17% drop in its share price in April, investors will be hoping for strong results from Salesforce when the company reports earnings on Tuesday, May 31. Analysts estimate revenue of around $7.38 billion, up 23.7% from the previous quarter. Earnings-per-share (EPS) is expected to drop 22.3% quarter over quarter.

To go deeper into the analysis, Salesforce is considered a growth stock. These tech companies saw a huge boost in value during the health crisis but it created a bubble that is now deflating. The good news, however, is the cloud software sector is big enough that it won’t completely collapse. So even if the stock experiences a drop in value, this is only due to an aggressive valuation in 2020-2021 which is dropping back to “normal” again in 2022. So if you are investing for the long term, Salesforce could therefore be a stock to watch.

Cloud software is part of our Thematic Investment lists which we recommend you check out.

Economic and earnings calendar

Monday – Inflation rates in Spain, Belgium and Germany (May). Economic sentiment in the euro zone (May). Business climate in the Netherlands (May).

Tuesday – Inflation rates in France, Italy, Austria and the euro zone (May). Unemployment rate in Germany (April). GDP growth in France and Belgium (Q1). Quarterly results from Salesforce, Victoria’s Secret, Adler.

Wednesday – Fiscal balance in France (April). GDP growth in Austria (Q1). PMI manufacturing index in the euro zone (May). New vehicle registrations in France (May). Unemployment rate in Ireland (May). US Federal Reserve Beige Book.

ThursdayUnemployment rate in Spain (May). US weekly unemployment figures. OPEC+ meeting. Quarterly results of Broadcom, Lululemon, Remy Cointreau.

Friday – Trade balance in Germany (April). Industrial production in France (April). PMI services index in the euro zone and the United States (May). New vehicle registrations in Germany (May). Quarterly results from Asana.

We’ll be back next week with another edition of the BUX Breakdown. In the meantime, have a great week on the markets!

This BUX Breakdown was written by Clémentine Pougnet.

All views, opinions, and analyses in this article should not be read as personal investment advice and individual investors should make their own decisions or seek independent advice. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.