Wolf Money(world market review 31 Jul-4 Aug 2023)

 

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Market Summary 31 Jul-6 Aug 2023

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- Fitch cuts US long-term rating to AA+ from AAA, citing debt ceiling issue 

- White House and Treasury Dept raised objections to decision by Fitch to downrank long-term US rating 

+ US labour productivity jumped by most since 2020 at 3.7% annual rate in Q2, helping offset rising labour cost 

- US Treasury Dept announced increase in issuance of longer-term bonds in coming mths 

- US 10-year borrowing costs rise to 9-mth high

- US mortgage rate on 30-year home ticked up to 6.9% vs 4.99% a year ago; 15-year fixed rate at 6.25% vs 4.26% a year ago 

- US banks reported tighter credit standards, weaker loan demand from both businesses and consumers in Q2: Fed survey 

+ US private sector added 324,000 jobs in Jul, above expectations: ADP

+ US weekly jobless claims rose slightly of 6000 last week to adjusted 227,000, layoffs dropped to 11-mth low in July 

- US employment totalled 9.58m for Jun vs 9.62m in May, lowest level of openings since Apr 2021 

- US Kansas state’s regulators shut down Heartland Tri-State Bank due to insolvency and appointed FDIC as receiver 

+ BofA CEO reversed prediction for a recession in coming mths due to strength in jobs market and robust consumer spending 

- US accused China of trying to use status as developing country to seek profit and avoid responsibility 

- US construction spending rose 0.5% in Jun, data for May was revised higher to 1.1% instead of 0.9% 

+ Intel partnered with China Nanshan district govt and local tech firms with chip innovation centre 

+ Berkshire Hathaway Q2 net income hit US$35.91bn

+ Apple net profit rose 2.3% to $19.9bn, earnings per share jumped 5% to $1.26, ahead of forecasts for $1.20.

- Tesla China’s Jul sales declined 31% compared to Jun 

+ Ford’s US sales rose nearly 6% in Jul, however EVs are still lagging 

- Trump appears in court to face charges of election subversion efforts

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- China’s official manufacturing PMI rose to 49.3 in Jul from 49 in Jun, remained in contraction for 4th straight mth 

- Chian’s non-manufacturing gauge fell to 51.5 from 53.2; measures business sentiment in services and construction sectors 

+ Caixin/S&P Global services PMI rose to 54.1 in Jul, up from 53.9 in Jun, expanded for 7th straight mth

+ China central bank vowed to use multiple policy tools to ensure steady economic recovery in H2

+ China to continue support the stable and healthy growth of the property market amid overall economic slowdown  

- China’s Jul new property sales by biggest developers plunged by >33% 

+ China vows further mortgage easing to support housing, plans to implement precise and differentiated housing credit policies 

+ China’s biggest cities Shanghai, Beijing, Shenzhen and Guangzhou expected to relax purchasing restrictions 

- China’s export controls on gallium and germanium take effect 1st Aug, may first hit entities from countries cracked on China 

+ China will launch its first 28-nanometer homegrown lithography machine at year-end: report 

+ China introduced 26 measures to support high-quality economic development; include boosting auto consumption

+ China extends small-business tax relief for 4 more years; easing VAT, income tax rates and other business costs 

+ China stepping up support for micro-sized, medium-sized enterprises, making easier and cheaper to get financing 

+ China finance ministry issued bonds worth ¥12bn in HK 

- China provincial govt audits reveal spending vouchers have not worked well 

- China planning a year-long nationwide crackdown on corruption in pharmaceutical sector

- China’s medical exports tumble as world moves on from Covid 

+ China total 39 companies made their debut or re-entered Fortune Global 500 list; CATL and Meituan appeared for the 1st time 

- China proposes to limit children’s smartphone time to maximum of 2hrs a day 

+ Huawei was the only company among top smartphone vendors to record double-digit shipment growth in domestic market 

- China records heaviest rainfall in at least 140 years, causing severe flooding and at least 20 deaths 

+ BYD hires 30,000 college graduates so far this year: sources 

+ Luckin coffee beats Starbucks in China for the 1st time, posts 2nd qtr sales of US$862m vs Starbucks US$822m in China 

- Shimao Gp shares plunged >67% by most on record or US$1.1bn in market cap as trading resumed after 16 mths  

- CK Assets’ new home launched selling at lowest prices in 7 years, about 20% below market rates

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- Japan to expand anti-Russia sanctions to cover wider range of goods, including metals, chemicals, industrial gear

+ Toyota to ram up EV car push in China with R&D revamp 

- Russian grain exports hit record high in Jul, shipments reached 5.68m tons 

+ Gazprom set new record for daily gas deliveries to China through Power of Siberia mega pipeline 

+ Bitcoin mining machines have been flowing into Russia: CoinDesk 

+ Argentina taps China currency swap line to help repay IMF loan 

+ Global  shipping costs jumped by most in >2 years after 16-mth slump in ocean freight 

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- Germany HCOB final PMI for manufacturing , accounts for 1/5 of economy fell to 38.8 in Jul from 40.6 in Jun, 6 consecutive mthly decline   

- German seasonally-adjusted unemployment rate at 5.6% in Jul vs 5.7% in Jun, at 2.617m 

+ German agricultural machinery manufacturer CLAAS to continue business with Russia 

  - BoE raises interest rates to 5.25%, bringing borrowing costs to 15-year high, hints borrowing rates will stay high  

- UK manufacturing PMI fell to 45.3 in Jul from 46.5 in Jun, fell at fastest pace in 7 mths 

- UK house prices fell by most since 2009 in the 12 mths to July, averagely down 3.8% 

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- Australia Senate committee recommended ban on TikTok from federal govt devices be extended to WeChat 

+ India considers scrapping wheat import tax to cool prices

+ Saudi n China in talks for ETF cross-listings to bolster financial ties 

- Saudi Arabis’s GDP expended annual 1.1% in Q2, down from 3.8% in previous qtr and 11.2% same period 2022

- Saudi to extend unilateral production cut of 1m barrels of oil a day through end of Sept 

+ Iran boosts oil production to 5 years high to 3.1m bpd 

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+ Indonesia’s new capital construction had reached almost 30% of its target: Ministry

+ Indonesia inflation drops to almost below 3% in Jul, at 3.08%

+ Thailand to remain open to Chinese investors, build resilient supply chain

+ Malaysia working on plans to build Sabah, Sarawak rail link to Indonesia’s new capital 

+ Malaysia: Infineon Tech will invest up to €5bn over next 5 years to build world’s largest 200mm SIC power fab plant   

- Sg PMI inched up 0.1 pt  in Jul to 49.8

- Sg retail sales rose 1.1%YoY on jun, vs May’s 1.8% growth

+ Sg aviation sector to fill >4300 jobs in coming years, at 95% of pre-Covid level

Contribution by Derek@valueinvestments chat group. Thank you

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