Wolf Money(world market review 15-21 July 2024)

 

Ong Kim Seng Singapore 1954

Kampong Radin Mas circa 1967

Collection of National Gallery Singapore

Market Summary 15-21 Jul 2024

*USA* 

+ US Philadelphia Fed Manufacturing Index soared to 13.9 in Jul, highest level in 3 mths 

-US retail sales stalled in Jun from May, following upwardly revised 0.3% rise in previous period 

+ US business inventories rose 0.5% MoM in May, following 0.3% increase in Apr

+ US manufacturing production rose 0.4% MoM in Jun vs expectations of 0.2% increase 

+ US industrial production up 0.6% MoM in Jun vs expectations of 0.3% increase 

-US export prices fell 0.5% MoM in Jun, vs downwardly revised 0.7% decline in May, import prices flat 

-US weekly jobless claims increased 10,000 to seasonally adjusted 243,000 for wk ended Jul 13 vs expectations of 230,000

+ US net foreign acquisitions of long-term securities, short-term US securities, banking flows at net inflow of US$15.8bn in May vs revised US$64.2bn inflow in Apr 

-US told allies its considering using most severe trade curbs available if companies continue giving China access to advanced semiconductor technology 

-US chip stocks shed US$480bn on China trade fear, Trump’s Taiwan comments 

+ US privately-owned housing starts saw monthly increase of 3% in Jun to reach 1,353,000

+ US building permits rose by 3.4% to seasonally adjusted rate of 1.446m in Jun, highest in 3 mths 

+ US average rate for 30-year fixed mortgage fell by 12bps to 6.77% as of Jul 18, lowest level in 4 mths: Freddie Mac 

-US crude oil inventories declined by 4.44m barrels, dropped for the 3rd straight week, also 4th weekly draw in last 6 weeks 

-SpaceX and X to move to Texas in response to legislation to lets teachers keep students’ gender identity from parents 

-Microsoft estimates 8.5m devices affected in massive IT outage caused by CrowdStrike which paralysed airports, banks, payment systems globally 

-Bank of America net income down 7% in Q2 landed at US$6.9bn, revenue up 1% to US$25.4bn 

-Berkshire sold around US$1.48bn Bank of America shares: filing 

+ Morgan Stanley net income in Q2 up 41% YoY reaching US$3.1bn, revenue came in at US$15bn 

+ OpenAI debuts new AI model GPT-4o mini, to discuss with Broadcom of potential development of new AI chip

+ Ford to invest US$3bn to expand production of its Super Duty trucks 

*SOUTH AMERICA / WORLD*

+ Argentina recorded trade surplus of US$1,911m in Jun vs US$1,833m deficit same period last yr, at 7th consecutive surplus, largely due to 35.4% decline in imports  

-Global tech outage leaves thousands stranded at airports amid disruptions 

+ Global airline passenger traffic expected to double in 20 yrs from 4.3bn in 2023, led by emerging markets Asia Pacific and ME

*CHINA*

+ XI vows tax reform, to gradually allow regional authorities to receive more consumption tax, signals more revenue will shift to local coffers 

+ China’s decision at recent key high-level meeting to create favourable environment, more opportunities for private enterprises aims to shore up confidence of private sector, drive advanced productivity, spurring future economic growth

+ China’s economy expanded 4.7% in Q2 YoY, expansion slowest in 5 qtrs 

+ China’s industrial output rose 5.3% in Jun YoY vs 5.6% in May 

+ China’s retail sales rose 2% in Jun vs 3.7% increase in May 

+ China expects to improve its macroeconomic governance system with further effort to reform fiscal and financial systems 

+ China General Nuclear launched nation’s 1st full green virtual power plant, to supply electricity for 80% of an industrial park in Ningbo 

+ Beijing relaxed auto ownership restrictions for the fist time in 10 yrs, offered 20,000 extra EV license plates to boost auto sales 

-China’s youth jobless rate falls for a 3rd mth to 13.2% 

+ China passenger rail traffic rose 18.4% YoY to 2.1bn in H1, outpacing freight as commodity demand slides, edged up only 0.6%

+ China many lithium producers begun cutting output as prices continued to fall 

+ PingAn unveiled US$3.5bn convertible bond issuance to expand into fiancé, healthcare and elderly care sectors

+ China’s pet economy expected to reach ¥811.4bn (US$112bn) by 2025, driven by elderly, singles

+ China has topped the World Spirits Alliance’s rating in global alcohol sales in 2022 with sales worth US$215bn 

+ China’s EV marque Aion begun operations at its first overseas plant in Thailand 

-HK business confidence indicator at -1 in Q3 vs a +2 in Q2

+ Macau visitor up by 15.5% YoY to 2.55m in Jun, recovering to 82.4% of Jun 2019 level 

+ TSMC’s Q2 revenue up by 40.1% to US$20.82bn, net income grew by 36.3% to US$7.66bn 

-TSMC Chairman ruled out JV in US when asked about effects of recent geopolitical concerns 

*EUROPE*

+ ECB to keep interest rates unchanged in Jul as current data supports previous inflation outlook 

+ EU posted trade surplus of €9.7bn in May vs €2.6bn deficit in May 2023, imports down 6.2% , exports down 0.6% 

+ Eurozone posted trade surplus of €13.9bn in May, vs expectations of €18bn, import down 6.4%, exports down 0.5%  

+ EU new car registrations rise by 4.3% YoY to 4.5 yrs high of 1.1m units in Jun, registrations rose by 4.5% to nearly 5.7m in H1 

+ Eurozone’s annual inflation rate at 2.5% in Jun vs May’s 2.6% 

-Euro Area construction output tumbled 2.4% YoY in May, fell the most in >3 yrs 

-German ZEW Indicator of Economic Sentiment declined to 41.8 in Jul, first fall in a yr  and lowest level in 4-mth  

-Germany’s producer prices down 1.6% in Jun YoY vs 2.2% decline in prior mth 

+ UK Gfk Consumer Confidence rose -13 in Jul from -14 in Jun, hits near3-year high

+ UK annual inflation steady at 2% in Jun, annual core inflation unchanged at 3.5% in Jun 

-UK public sector net borrowing, excluding public sector banks dropped to £14.5bn, total public spending down by £1.6bn to £102.7bn 

+ UK has no plans to follow EU to impose tariffs on imports China-made EVs: Minister 

+ Britain becomes the first country in Europe to commercialise lab-grown meat for pets

-France’s current account deficit fell to €3.1bn in May, from revised €3.5bn in Apr 

-France many most wealthy residents may consider leaving  over concern about political instability, prospect of higher taxes in light of recent parliamentary election: Bloomberg 

+ ASML beats Q2 earnings forecasts with net income US$1.74bn, bookings rise on AI demand 

+ Russian newly launched digital ruble should be fully incorporated into the economy now as test phase of adoption is drawing to a close: Putin 

-Ukraine to get first US$1.5bn of seized Russian cash: Euroclear 

*ASIA*

+ Japan Reuter Tankan sentiment index for manufacturers jumped to +11 in Jul from +6 in Jun, hits 7-mth high

+ Japan’s annual inflation at 2.8% in Jun, unchanged from May, stayed at 3-mth peak 

-Japan posted trade surplus of ¥224.04bn in Jun, 2nd surplus this year in trade balance 

+ Japan exports rose 5.4% YoY to ¥9,208.64bn in Jun, marking 7th straight mth of increase  

-Japan will provide US$3.3bn in loans to Ukraine funded by proceeds from Russian assets blocked as part of Western sanctions 

+ India forex reserves surged to equivalent of US$666.85bn as of 12 Jul to reach record high 

+ South Korea export prices soared 12.2% YoY in Jun, biggest rise since Oct 2022, 6th consecutive mth rise driven by weaker Won 

-South Korea import prices surged 9.7% YoY in Jun, biggest rise since Nov 2022 due to weaker Won 

+ Samsung to launch energy-efficient air conditioner in North America, utilising AI to reduce power consumption by up to 30% 

+ Saudi annual inflation edged down to 1.5% in Jun, lowest in 6 mths 

*ASEAN*

+ Bank Indonesia kept interest rate unchanged at 6.25% in July meeting 

+ Philippines cash remittances grew 3.6% YoY to US$2.58bn in May, up by 3% to US$14.89bn first 5-mth 

+ Malaysia’s GDP advanced 5.8% YoY in Q2, boosted by all sectors, highest growth since Q4 of 2022

+ Malaysia exports up 1.7% YoY to RM126bn in Jun vs market forecasts of 4.6%, softest growth in shipments since Mar 

+ Malaysia’s trade surplus slumped to RM14.3bn in Jun vs RM29.1bn same mth last yr, mainly due to jump in imports that surged 17.8% to RM111.76bn at 5-mth peak 

-Sg NODX shrank 8.7% YoY in Jun, vs estimates of 1.2% fall after revised 0.7% drop in May, marked 5th consecutive mth of decline 

-Sg developers’ new home sales slumped to record low for H1 with total of 1916 units transacted, 43.4% lower than in 2023 YoY

+ Temasek aims to invest up to US$10bn in India, turns cautious on China 

Contribution by Derek@valueinvestments chat group. Thank you.

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