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Writer's pictureAda Tam Ying Ying

Market Update : Can Lower CPI... lead to a stop in interest rate at FOMC next week?

( My Recommendation 🉐 )

STI Market forecast for 2nd half of July :


"From now on, buy slowly whenever there's any drastic pull back... "... that is my last sentence of last writeup to you. I hope that all of you have some gain from last week rally. Last week, most of the stock markets had surged due to the lower US CPI data last Wed, and it had re-ignited the hope of US interest rate may come to a stop soon (not just a pause). And fund managers were rushing to buying into laggard sectors like banks and property (include REITs) counters as they have the biggest price jump during last week rally because these 2 sectors should be the biggest beneficiaries from the slower rate hike.


Based on the technical analysis, STI had break-out from the triangle pattern on last Friday, and next week STI needs to stay above 3240 in order to keep up with the uptrend momentum. In fact, investors must take note that NODX (mom) had been released last Sunday, this data is very important to keep STI uptrend. But as long as there's a slowdown in export falling. The likelihood is market will also take it as market bottling. Therefore, investors may continue to buy into the markets.


During this earnings reporting season, if the companies' earnings are showing increasing profit, it will add on to market confidence. Therefore, I advised investors should buy as long as there's pull back in the market next week because next FOMC meeting fall on July 25-26, those careful fund managers may wait for more hints dropped from FOMC officials before entering the market, and it will give chance for investors to stock up in their portfolio.


On 14 July: STI just breakout from trendline

On 18 July: STI still intact above trendline



Market Update for past 2 weeks

Investor's Must-Know


Past Economic Events to note last week:

Singapore


Hightlights

  • Singapore ranked third on openness to cross-border data flows

  • Singapore's key exports (NODX) fall by 15.5% in ninth consecutive month of contraction; mainly due to Malaysia, Indonesia and South Korea [link]

  • Singapore GDP : Singapore avoids technical recession as economy grows 0.7% year-on-year in second quarter [link]

  • Malaysia attempts revival of KL-Singapore high speed rail project with request for proposals [link]

  • Temasek’s net portfolio value down by 5.2% y-o-y to $382 bil; reports $7.3 bil loss [link]

  • Singapore and Vietnam beef up economic and bilateral ties with signing of 12 MOUs


Singapore result reporting season time table:


Economic Data (last weeks)

Latest Singapore Economic Data (Jun) :

Non-Oil Exports mom : -14.60% to 5.4%

Non-Oil Exports yoy : -14.80% to -15.50%

Trade Balance : 5.486B to 5.788B


United States

US presidential election will be held in Nov 2024


Hightlights

  • Treasury Secretary Yellen Doesn't Expect US Recession [link]

  • US dollar's busted bull run has bears calling end of an era [link]

  • US Banks kicking off tonight with US earning season; and JPMorgan Q2 profits surge [link] 14 Jul: JP Morgan, Citi, Wells Fargo 18 Jul: Morgan Stanley, BOA 19 Jul: Goldman Sachs

  • The latest lower US CPI, had triggered new hopes in market on interest rate may come to a stop soon... investors must watch out for next week data release date:

Tue 18Jul: Retail Sales; Industrial Production

Wed 19Jul: Building Permits

Thu 20Jul: Initial Jobless Claims; Existing Home Sales

  • Fed officials say higher interest rates are needed to reach 2% inflation goal

  • US considers limits on cloud computing for China


Economic Data (last week)

US Consumer Price Index in June; US inflation cools to 3% and core CPI rises less than forecast : Core CPI mom : 0.4% to 0.2% Core CPI yoy : 5.3% to 4.8% CPI mom : 0.1% to 0.2% CPI yoy : 4.0% to 3.0%

Core US PPI yoy : 2.6% to 2.4%



Other Countries

China, Hong Kong

US Treasury Secretary Janet Yellen wraps up visit to China [link]

China and HK : Investors awaiting Q2 GDP and data trio on Monday; and reported as followed:

Fixed Asset Investment yoy : 4.0% to 3.8%

GDP yoy : 4.5% to 6.3%

GDP qoq : 2.2% to 0.8%

Industrial Production yoy : 3.5% to 4.4%

Unemployment Rate : 5.2% unchanged

Retail Sales yoy : 12.7% to 3.1%


Other important data, CPI and PPI, that had previously been released on 10 July 2023 included:

CPI (MoM) (Jun) remains at -0.2%

PPI (YoY) (Jun) -5.4%, prior -4.6%


# China's exports fall most in three years as global economy struggles [link]

# China to extend policies to support ailing property market

# US starts new round of audit inspections on China firms [link]


My commentaries:

China Tech Stocks are quite undervalued at the moment. If U don't want to chase the high valued US tech shares now..., another alternative can consider HST.SI - Lion-OCBC Securities Hang Seng TECH ETF...


Others

Japan, FTSE 100, DAX, CAC 40 and EURO STOXX 50, others...


# India Considers Banning Most Rice Exports on Inflation Fears [link]

# Companies play catch-up as cybersecurity attacks rise in digital India




Coming Important Economic Data to take note:


➡️Singapore

Important data announced next week:

Sun/Mon 16/17 Jul, 2023 : Non-Oil Exports* [link]

: Trade Balance

Thu 20 Jul, 2023 : URA Property Index


➡️United States

Mon 17 Jul, 2023 : NY Empire State Manufacturing Index

Tue 18 Jul, 2023 : Core Retail Sales / Retail Sales

: Industrial Production

Wed 19 Jul, 2023 : Building Permits

: Crude Oil Inventories

Thu 20 Jul, 2023 : Initial Jobless Claims

: Philadelphia Fed Manufacturing Index

: Existing Home Sales

: Fed's Balance Sheet


➡️China, HK

Sun/Mon 16/17 Jul, 2023 : Fixed Asset Investment

: GDP

: Industrial Production

: Chinese Unemployment Rate

Tue 18 Jul, 2023 : (HK) Unemployment Rate


 

Other Market Focus that Matters


📌 🌀Highlights🌀


  • Oil prices settle up as mild US inflation data calms fear of Fed rate hike [link]

  • Nasdaq 100 Plans Special Rebalance To Curb Dominance Of 'Magnificent Seven' | Investor's Business Daily [link]

  • Ant Group launches $6bn buyback after regulatory crackdown ends; Ant to buy back shares at 70% lower valuation than at IPO

  • Alibaba Considers Participating In Ant Group’s $6 Billion Share Repurchase Program [link]

  • JD.com joins China’s AI race with a model for enterprise use

  • Nium eyeing secondary listing in Singapore alongside 2Q2025 NYSE IPO goal

  • Microsoft cleared to buy Activision in US as UK pauses fight


Singapore :

  • Singapore-based wastewater treatment startup Hydroleap raises US$4.4 mil in Series A round

  • HKEx listing committee approves Centurion’s proposed delisting

  • Penguin extends cash offer closing date to Aug 3

  • TA Corporation requests for voluntary trading suspension

  • Thomson Medical Group launches and prices $30 mil worth of 5.5% notes due 2028

  • Thomson Medical Group to acquire Vietnam's FV Hospital for up to $517.1 mil

  • SIA Group’s PLF reaches monthly record of 90.6% due to ‘robust demand’ during mid-year holidays and summer travel season

  • SingPost appoints BofA Securities as financial advisor for strategic review

  • Aspen Group to wind up glove subsidiary

  • Sabana REIT's trustee issues draft letter guiding on uncertainties, timeframe, costs of EGM resolutions

  • IREIT Global raises $75.9 mil as preferential offering 134.7% subscribed

  • Keppel Corp divests 28.44% stake in Thai-listed SVOA for $23.4 mil

  • GSH sells office units in Cecil Street for $38.8 mil

  • Seatrium secures $1.04 bil green trade finance facility from OCBC

  • Mapletree Investments makes first foray into Japanese logistics real estate market

  • UOL Group, CapitaLand JVs win tender for Tampines Ave 11 site for $1.21 bil

  • Aoxin Q&M subsidiary upgraded to authorised primary processing partner for dental materials supplier

  • SIA Engineering Co signs JV with NYSE-listed Eaton

  • DBS divests 77.8% stake in AXS to private equity firm Tower Capital Asia

  • Keppel Corp signs US$70 mil worth of energy-as-a-service contracts in Vietnam

  • Megachem issues profit warning for 1HFY2023 earnings; Megachem's warehouse building affected by fire incident

  • Duty Free International reports higher earnings with travel resuming

  • Dasin Retail Trust reports $277.9 mil loss for FY2022

  • Keppel Corp acquires 65% stake in a project company that will hold a retail property in Hanoi for $70 mil

  • Singapore Paincare enters China market through JV with Puxiang Healthcare subsidiary

  • Soilbuild Construction secures $118.7 mil in contracts to commence in 3Q2023



📌 🌀SG Earning Announcement🌀

Watch out for the Second Quarter Earning reporting season in July 2023...


  • Manulife US REIT (MUST) ’s portfolio valuation falls by 14.6% to US$1.63 bil; aggregate leverage breaches 50% limit Lack of payment from Tiong Aik to negatively impact King Wan’s FY2024 earnings

  • Ho Bee Land issues profit warning, citing need to book fair value loss on London investments

  • Fortress Minerals reports 1QFY2024 earnings of US$2.5 mil, 40.2% lower y-o-y

  • Nanofilm shares drop following profit warning

  • Nanofilm abandons FY2025 earnings and revenue target following profit warning for 1HFY2023

  • Duty Free International reports higher earnings with travel resuming



📌

🌀Latest Market View published in ZaoBao/Media🌀

(June 2023)


Interview at ZaoBao on 17 July


My Commentary @ Noon on 10 July



Interview at ZaoBao on 8 July




📌

🌀SGX & Other Newsfeed🌀



 

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