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Market looking toppish again, switch to defensive stocks

Posted by Adrian on April 29, 2007

Dow Jones has reached a record high of 13120.94 at last week closing.  It is a trend every year that investors usually sell in May and go away (if you remember what happen last year during the World Cup 2006). 

An excerpt of Market News from the US :

WASHINGTON (MarketWatch) — The sluggish growth in the U.S. economy likely persisted into April, economists said ahead of a busy week on the data calendar.

As is usual in the first week of the month, the focus for traders and economists will be on the nonfarm payrolls report and the Institute for Supply Management index for April. Quarterly productivity data could also raise some eyebrows.

After jumping by 180,000 jobs in March, nonfarm payrolls likely grew at about half that pace in April, economists said. The median forecast of economists surveyed by MarketWatch sees payrolls up by about 98,000, with the unemployment rate bouncing back up to 4.5% from a cyclical low of 4.4%.

Average hourly earnings probably rose 0.3% on the month, our survey says, providing some relief on the inflation front, as the year-over-year increase in wages eased to 3.9% from the peak of 4.3% in December.

Summary:

Switch your small caps stocks to defensive blue chips like SPH, SIA Engineering, ST Eng.  Protect your capital and buy on dip.

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