Wolf Money(world market review 22-28 July 2024)



Cheong Soo Pieng Singapore 1917-1983

At the Market circa 1964

Collection of National Gallery Singapore 

Market Summary 22-28 Jul 2024

*USA* 

+ US GDP grew at 2.8% pace in Q2, better than expected: advance estimate 

+ US personal consumption expenditure price index edged up 0.1% MoM in Jun 

+ US year-ahead inflation expectations fell for 2nd straight mth to 2.9% in Jul, lowest since Mar, from 3% in Jun 

+ Joe Biden announced he will end  his presidential re-election campaign 

+ Fed seen on track for Sept rate cut after good inflation data 

+ US PMI Composite Output Index, take both services and manufacturing business activity at 55 in Jul, at 27-mth high 

+ US personal income rose 0.2% in Jun after advancing 0.4% in May 

+ US Services Business Activity Index climbed from 55.3 in Jun to 56 in Jul 

-US manufacturing PMI down 2.6 index pts to land at 49.5, lowest pt in 6 mths due to worsening business conditions within the goods-producing sector 

-US new orders for manufactured durable goods down by 6.6% in Jun to reach US$264.5bn 

-US goods trade deficit decreased to US$96.8bn in Jun, down 2.5% MoM: preliminary report 

-US Consumer Sentiment Index fell 2.6% MoM to 66.4 and down 7.1% compared to the same mth in 2023 

+ US personal spending up 0.3% MoM or US$58.6bn in Jun, matching expectations 

+ US jobless claims declined by 10,000 to 235,000 

-US existing home sales down 5.4% to 3.89m in Jun MoM 

-US sales of new single-family houses down 0.6% in Jun to 617,000

+ US a heavyweight gp executives from US-China Business Council met with Chinese Vice-Premier n Foreign Minister in Beijing  

+ California set targets for renewable energy adoption, requiring 90% all retail electricity sales from renewable sources by 2035, 100% by 2045 

-OpenAI could lose as much as US$5bn this year; training costs, including paying for data could be as much as US$3bn 

-Apple’s market share in China fell by 2% pts YoY landing at 6th position, share coming in at 14%: Canalys  

+ Tesla expects to produce “several thousand” Optimus robots by end 2025

+ Alphabet to commit to a multi-year US$5bn investment in its self-driving vehicle unit Waymo LLC 

-Wiz, cybersecurity startup rejected Alphabet’s US$23bn takeover offer, will instead pursue an IPO, its original plan 

+ Boeing resumed delivery of 737 MAX aircraft to Chinese airlines

-Delta cancelled >6000 flights since the tech outage started, far more than other airline

+ GM China JV with SAIC NEV sales surged by 35.5% YoY in H1

-Berkshire Hathaway sold US$2.3bn Bank of America shares over 6 trading days 

*GLOBE*

+ G20 agreed to work together to adopt a common tax for ultra-rich 

-World facing weakest growth in decades: IMF 

*CHINA*

+ China’s 3rd plenum signals the govt’s focus on greater fiscal flexibility, particularly in balancing revenue and expenditure between central and local administrations  

+ China will formulate a law to combat cross-border corruption and improve its constitutional review system

+ China vowed to improve early warning systems to identify threats to its interests and investments overseas 

+ PBoC to cut its 1-year medium-term lending facility (MLF) loan rate from 2.5% to 2.3%, also injected ¥235.1bn via its 7-day reverse repurchase program at interest rate of 1.7% 

+ PBoC cutting its 1 and 5-year loan prime rate (LPR) by 10 basis pts, 1-year LPR currently at 3.35% and 5-yr rate at 3.85%  

+ China’s 6 largest state-owned banks cut deposit rates for the first time since Dec, ranged from 5 to 20 bps for different terms 

+ China’s central State-owned enterprises to invest >¥3 trillion for large-scale equipment upgrades over next 5 yrs 

-China’s weak fundamentals of local govt financing vehicles are not being properly addressed: S&P Global Ratings 

+ China increased subsidies for trading in old traditional fuel cars for new ones of US$41bn stimulus program to boost consumption 

+ China connected total of 1180 GW of wind and solar power by end Jun, accounting for 38.4% of total power-generating capacity, tops coal for the first time 

- China’s largest economic province Guangdong reported 3.9% growth in its GDP in H1, vs national average of 5% 

+ China’s domestic tourism surged 14.3% YoY in H1

-Shanghai posted 9.4% slump in retail sale in Jun, worst monthly figure since 2-mth pandemic lockdown in spring 2022 

+ China drives Asia’s venture capital market with 6 of the top quarterly deals: KPMG 

+ China will buy >8000 commercial planes through 2043, accounting for 20% of global demand: Boeing 

+ China unveiled action plan on green development of data centres, specifying targets to accelerate low-carbon transition 

+ Chinese smartphone vendors filled out entire top-5 list for the first time in Q2, knocking Apple to no. 6 

+ Foxconn to invest ¥1bn to build a new HQ in China to make EVs and batteries 

*EUROPE*

-Eurozone PMI Composite Output Index expected to come in at 50.1 in Jul, reaching 5-mth low 

-European Commission: 10% of €1.5bn frozen Russian assets to Ukraine, 90% to EU fund 

-EU reportedly extend sanctions on Russia central bank indefinitely 

-EU to issue its first antitrust charges against Meta Platforms 

+ Germany’s cabinet agreed to increase tax relief for companies and households to almost €21bn per year to boost economy

-Germany’s HCOB Flash composite manufacturing PMI index fell to 48.7 in Jul, lowest in 4 mths: HIS Markit’s preliminary report 

-Mercedes-Benz’s Q2 revenue at €36.7bn, down 3.9% on annual basis 

-UK new Chancellor to unveil a £20bn spending deficit left by previous govt 

+ UK private sector reported its strongest growth in 15 mths, manufacturing PMI at 51.8, highest in 2 yrs 

-UK number of bankruptcy declarations in England and Wales reached highest level in over a year in Jun 

-LVMH’s  H1 revenue down 1% to €41.7bn 

-Russian central hikes interest rate to 18% from 16%, citing inflationary pressures 

+ Russian to ramp up energy supplies to China 

*ASIA*

+ Asia surpassed Europe as largest export market for Chinese solar products in H1 

+ Japan’s activity in service sector output expanded in Jul to 53.9 vs 49.4 in Jun: S&P Global preliminary report  

-Nippon Steel to end 20-year JV with China’s Baoshan 

+ Toyota to open new plant in Kyushu, known as Japan’s Silicon Island, to build batteries for EV 

+ India’s business growth at its fastest pace in 3 mths in Jul, companies hired at fastest pace in >18 yrs  

-South Korea GDP fell 0.2% in Q2 MoM; slumping consumer spending undermined export boom, sharpest contraction since 2022 

+ SK Hynix, Nvidia’s supplier, to build US$6.8bn chip plant in South Korea

*ASEAN*

+ Indonesia govt received proposal to establish 7 new special economic zones (SEZ), including 1 near new capital Nusantara  

+ Indonesia launched 2nd phase industrial complex in Central Java to attract investors looking to diversify supply chains away from China

+ Bali expected to begin construction of underground tunnels and tracks for LRT system in Sept 

+ Malaysia committed to reducing debt-to-GDP ratio to 60% within 5 yrs from current 64% 

+ Malaysia ranks among top 3 trade partners in China’s BRI, with trade surpassing US$100bn in H1

-Malaysia to review anti-dumping laws as cheap China goods hurting local businesses 

+ Melaka proposed Southern Gateway Economic Corridor involving Melaka, Negeri Sembilan and Johor 

+ Malaysia has applied to join BRICS: Anwar

-Sg factory output down 3.9% in Jun, dragged down by electronics, biomedical sectors

+ MAS leaves monetary policy setting unchanged, expects full-year GDP at 2-3% 

+ Sg Jun’s headline inflation at 2.4% vs 3.1% in May

+ Sg office rents in central region rose 3.1% in Q2 vs 1.7% declined in Q1 

+ HDB resale price growth up 2.3% in Q2 on robust demand and tight supply 

+ Chiang Airport’s Q2 passenger movements hit 98.2% or 16.5m of pre-pandemic level 

-Grab’s acquisition of Trans-cab fell through as both parties withdrew 


Contribution by Derek@valueinvestments chat group. Thank you.

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