Wolf Money(world market review 19-15 Aug 2024)

 

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Market Summary 19-25 Aug 2024

*USA* 

+ Powell: “the time has come” for US to cut interest rates; timing and pace will depend on incoming data, evolving outlook and the balance of risks 

-US economy created 818,000 fewer jobs in the 12-mth period through Mar 2024, nearly 30% lesser than initially reported; biggest downward revision, professional n business services at 358,000 lesser 

-US Manufacturing PMI fell to 48 in Aug vs 49.6 in Jul, mark 2nd consecutive contraction in factory activity at sharpest pace this yr

-US PMI Composite Output Index fell to 54.1 to its lowest level in 4 mths: S&P Global

-US initial jobless claims rose by 4000 to 232,000 vs expectations of 230,000

-Dollar hit 7-mth low on rate cut bets 

-US Treasury yields fell toward 3.8%, approaching its lowest level in 14 mths after Powell gave clear signals of interest rates cut 

-US building permits fell 3.3% to seasonally adjusted annual rate of 1.406m in Jul

+ US sales of new single-family homes up 10.6% MoM to >1 yr high, existing home sales up 1.3% in Jul, down 2.5% YoY

+ US median existing-home sales for all housing types up 4.2% annually to US$422,600 in Jul, total housing inventory stood 1.33m units, up 19.8% YoY 

+ US average rate on 30-year fixed mortgage at 6.46% as of Aug 22, marking its lowest level since mid-May 2023: Feddie Mac 

-US imposed new sanctions on >400 entities across Russia, Europe, ME, and Aisa linked to Russia’s war in Ukraine

-US targets 105 Russian and Chinese firms for aiding Russia military 

+ Apple targets Sept 10 debut for new iPhones, AirPods and watches: Bloomberg 

*COMMODITY*

+ Gold hits record high as weaker dollar and buying by Western investors 

*CHINA*

+ China to accelerate new model for real estate development, white list for financing: housing authority 

+ China currently has approved >5300 housing projects under white list mechanism with approved loans amounting to nearly ¥i.4 trillion

+ China’s imports of equipment needed to make semiconductors hit record US$26bn in first 7 mths 

+ China CPC to review policies and measures to open up new vista in large-scale development of western region 

+ China approved 11 nuclear power reactors, curbs coal power expansion

+ China’s stock exchanges tighten controls on high-frequency trading 

+ China of 68 semiconductor companies released financial reports for H1, 40 reported revenue gains of >50%: CITIC 

-China will temporarily halt its steel capacity replacement programme, which will limit expansion 

+ China’s rare-earth mining output quotas hit 270,000 tons to a new high so far this year 

-China’s motor industry suffered tough H1 with many dealers in the red due to price war and weak demand 

+ China’s homegrown civil airship AS700 completes 1000km flight, to facilitate low-altitude economy 

+ Tencent-backed video game ‘Black Myth: Wukong’ hits record player numbers on debut  

+ Huawei’s smart car unit valued at US$16bn flowing new investment 

+ Alibaba to convert to dual primary listing status on HK Stock Exchange, to connect Shanghai and SZ bourses to HK exchange  

+ Pin An Insurance profit rose 7% in H1, net income climbed to ¥74.6bn (US$10.5bn) 

+ Shein considering selling shares directly to the public in its IPO on London Stock Exchange, filed for IPO in Jun valued at US$66bn 

+ China’s largest milk tea seller Mixue applies for HK IPO

-HK inflation rate climbed to 2.5% in Jul from a 3-mth high of 1.5% in Jun, highest in 8 mths 

+ HKEX has booked first profit growth in 3 qtrs, net income up 9% YoY to HK$3.16bn (US$405m) on 7% gain in revenue  

-Macau retail sales plunged 27.2% YoY in Q2, following revised 17.9% fall in Q1 

*EUROPE*

+ Eurozone annual inflation rate rose to 2.6% in Jul from 2.5% in Jun

-Eurozone consumer confidence indicator down 0.4% pts to -13.4, in entire EU down by -0.1% to -12.3 

+ Eurozone inflation expectation over next 12 mths remained unchanged at 2.8% for 3rd mth 

+ ECB minutes keep door open for Sept cut without any pre-commitment 

+ EU approved German state aid for US$11bn TSMC chip plant 

-EU dairy industry could face challenges in finding export alternatives after China moved to probe EU dairy imports 

-German producer prices dropped 0.8% YoY in Jul, slowing from 1.6% decrease in Jun, fell the least in 13 mths 

-German business activity contracted in Aug for 2nd consecutive mth, S&P Global PMI fell to 48.5 in Aug from 49.1 in Jul 

+ BMW overtakes Tesla in European EV sales for the first time 

+ UK PM Starmer spoke with Chinese President Xi over the phone; urged “open, frank and honest” talks about areas of disagreement

+ France economy gets boost from Olympic, PMI for services sector hit 27-mth high of 55 in Aug from 50.1 in Jul

+ France manufacturing climate indicator rose to 98.8 in Aug, remained below its long-term average of 100 

+ Italy’s current account surplus expanded to €4.885bn in Jun to 11-mth high 

-Swiss Finance Minister: Debt levels in US and Europe are a risk for int’l financial stability and for the Swiss 

+ Russia and China to deepen cooperation on renewable energy, hydrogen energy, energy storage and carbon markets 

-Telegram app founder and CEO Durov arrested in France

*ASIA*

+ BoJ reaffirmed its commitment to raise interest rates if inflation sustainably touched the 2% target

+ Japan exports rose 10.3% YoY to 7th mth top in Jul vs 5.4% growth in Jun

-Japan’s trade deficit jumped to JPY621.84bn in Jul vs JPY61.33bn Jun YoY, 5th time of shortfall this yr, as imports grew faster much faster than exports 

-Japan annual inflation rate at 2.8% in Jul, at its highest level since Feb, core inflation hit 5-mth peak of 2.7%

+ Japan Composite PMI rose to 53 in Aug vs 52.5 in Jul, highest since May 2023, 7th time of growth in private sector activity 

-Japan Manufacturing PMI increase to 49.5 in Aug from 4-mth low of 49.1 in Jul, vs forecasts of 49.8

+ South Korea kept rate unchanged at 3.5% for the 13th time at Aug meeting; inflation eased but household debt mounted and hose prices soared   

-South Korea Business Survey Index for manufacturing sector dropped to 71 in Aug from 73 in Jul to 5 mths low 

+ Australia approved US$13.5bn project to export solar power to Singapore through a 4300km undersea cable

*ASEAN*

+ Indonesia interest rate unchanged at 6.25% in Aug, aimed to further stabilise Rupiah exchange rate, ensure inflation under control 

-Indonesia’s current account deficit widened to US$3.02bn in Q2 from US$2.5bn, largest since 2020

-Thailand’s economy is nearly in crisis due to declining exports and uncompetitive manufacturing: caretaker finance minister 

+ Malaysia exports growth surged 12.3% YoY to 19-mth high of RM141.1bn in Jul, trade surplus at RM6.4bn, smallest surplus since 2018

-Malaysia’s leading economic index declined 0.7% MoM in Jun, first drop in 3 mths 

+ Malaysia inflation rate remains at 2% in Jul for 3rd mth , food prices up 1.6% YoY vs 2% in Jun, smallest rise in near 3 yrs   

+ Sg annual inflation rate at 2.4% in Jul, annual core inflation rate fell to 2.5% from 2.9% in Jun, least since Feb 2022 

-Sg food prices up by 2.7% YoY in Jul, after a 2.8% rise in prior 3 mths, softest gain since Feb 2022  

-Sg fine-dining scene in dire straits; more closures expected before year end: BT 

+ Temasek offered ¥2.7bn (US$378m) worth of offshore Chinese yuan denominated bonds 

+ Sg more businesses plan to raise hiring next yr, despite expectations for economy remaining mixed: SBF poll 

-Sg to tighten HDB loan-to-value limit to 75% from 80%

Contribution by Derek@valueinvestments chat group. Thank you.

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