Notable market news this past week (07-Jul-24)
Here is the Skeptivest roundup of the latest market headlines for the week
🇺🇸 US hiring and wage growth fell in June; Data yet again bolster investor confidence in US rate cut
Job market is cooling, but only a little: US hiring and wage growth slowed in June, with the unemployment rate rising to 4.1% for the first time since 2021, while the addition of 206,000 jobs—slightly above expectations but fewer than the previous month—supports the case for a potential interest rate cut this fall. Federal Reserve Chairman Jerome Powell also indicated that it has “made quite a bit of progress” in bringing down inflation.
Investors gaining confidence of Fed rate cut: According to the CME Fedwatch Tool, investors are expecting assigning a 72% probability that the Fed will cut interest rates in September, an increase from 58% just a week ago.
☕️ Quick fire happenings to note
🌏 Global macro
- New British Prime Minister: New British Prime Minister Keir Starmer promised a government of “stability and moderation” after his Labour Party won a landslide victory over the Conservatives, ending 14 years of their rule, with critics calling former Prime Minister Rishi Sunak's election strategy a disaster, marking the first major center-left win in a year of significant world elections dominated by the far-right.
- Biden sat on TV interview to dismiss critics: Facing pressure from big donors to drop out, President Joe Biden tried to reset his 2024 campaign in a prime-time interview with ABC’s George Stephanopoulos, dismissing his poor debate performance against Donald Trump as a result of a cold and exhaustion, while insisting he is in good shape and committed to staying in the race.
- Resilient 2024 bull market defies political turmoil and economic shifts: Despite political turmoil, the 2024 bull market continued to thrive, with the S&P 500 rising in nine of the last 11 weeks, showing investor resilience even amid high election drama and initial market jolts from Biden's debate performance, which later stabilized as economic data supported potential rate cuts.
- Taiwan tensions: Amid simmering tensions with Taiwan's new president, China's Coast Guard detained a Taiwanese fishing boat and its six crew members near Kinmen island, controlled by Taiwan and located less than 3km from the mainland, sending them towards the Chinese port of Weitou in Jinjiang after boarding the vessel on Tuesday evening.
🏦 Individual stocks/companies
- 'Minecraft' diversifying away from gaming: Mojang Studios, the gaming studio behind the wildly popular title “Minecraft,” is exploring new revenue streams such as merchandising, education, and content-streaming so that it’s less dependent on gaming. When a game as popular as “Minecraft” feels it can’t rely on gaming anymore, that’s when you know the industry’s in trouble.
- Samsung Electronic's AI surge: Samsung Electronics reported its fastest sales and profit growth in years, driven by a recovery in memory chip demand due to global AI development, with a 15-fold surge in operating profit to 10.4 trillion won ($7.5 billion) and a 23% sales increase, marking the largest rise since 2021, boosting its stock to its highest level since January 2021.
- Revolut hit record $545m profit: Nikolay Storonsky, Revolut’s CEO and co-founder, said the company is feeling confident about securing its British bank license “soon”, after overcoming some key hurdles. Revolut released annual accounts Tuesday showing its full-year pre-tax profit rose to $545 million in 2023; the company cited strong user growth and revenue diversification.
- Tesla (+26.01% past 5 days) rallies: In total, Tesla delivered 443,956 cars last quarter, 4.8% lower than Q2’23 but an increase of 14.8% vs Q1’24. Consensus expectations called for 441k. A greater share of Q2’s sales were Tesla’s more expensive vehicles, meaning this could be an improvement to margins too.
🇸🇬 Singapore related
- Ninja Van cuts 5% of Singapore workforce: Logistics technology company Ninja Van has laid off 5% of its workforce in Singapore, it said on July 1, as the firm retools itself for its expansion into new logistics segments that was announced in April.
