Notable market news this past week (12-Nov-23)
Here is the Skeptivest roundup of the latest market headlines for the week
📈 US Stocks Rally Despite Weak Bond Auction & Inflation Fears
Stocks rallied on Friday to end the week higher for markets, led by technology stocks. This comes after a series of setbacks due to fresh concerns of inflation and unsuccessful bond auction
- The S&P 500 rose approximately 1%, achieving its best week in 2023.
- The Nasdaq Composite led major indexes to the upside, logging its highest finish since September with a 2.05% gain last week.
- The markets recovered from a weak 30-year bond auction, where investors were awarded 4.769% in yield, 0.051 percentage point higher than the yield in pre-auction trading, indicating demand for long dated US treasuries
Tech undoubtedly in in the driver seat: The end-of-year rally continues to be driven by a small group of tech companies going through stronger than expected earnings. Shares of Microsoft Corp. jumped 2.5%, with the Dow Jones component reaching yet another all time high. Intel Corp. shares also rose 2.8% on the week. Majority of analysts credit the rally to a persistent optimism on AI and cloud.
Fed chair warns against inflation "head fakes": Consistent with his cautious stance, Federal Reserve Chairman Jerome Powell told an International Monetary Fund panel that the central bank was wary of "head fakes" from inflation, hinting at higher for longer. He also reiterated that the 2% target was "not guaranteed" given the 'remarkable' performance of the US economy. Coupled with the disastrous bond auction, stocks dipped on Thursday. All eyes will be on US consumer price index (CPI) numbers due on Tuesday.
☕️ Quick fire happenings to note
🌏 Global macro
- South Korea will prohibit stock short-selling until Jun-24: In a move to curb illegal market practices and enhance market stability, South Korea's Financial Services Commission has imposed a ban on stock short-selling until June 2024. Effective Monday, the ban will prohibit trading with borrowed shares, a key element of short selling, for companies listed in the Kospi 200 and Kosdaq 150 indexes. This decision follows the uncovering of significant illicit activities involving naked short-selling by global investment banks.
- Chinese deflation continues to trouble investors: China's economy edged back into deflation in October, with the consumer price index (CPI) falling 0.2% year-on-year, according to data from the National Bureau of Statistics. This was compared to a 0.1% fall forecast by a Reuters poll of analysts and an unchanged reading in September.
🏦 Individual stocks/companies
- Apple to pause software updates: In a rare move, Apple has paused development of 2024's software updates for its products so that it can fix flaws and improve performance of existing software.
- WeWork bankrupt: WeWork has filed for bankruptcy, with the company listing almost $19b in debt, in a chapter 11 petition filed in New Jersey.
- Bumble CEO steps down as company struggle: As of January, CEO Whitney Wolfe Herd will step down from the dating app she founded in 2014. Dating apps in general are struggling, with Match Group's stock price tanking earlier this month after Tinder reported it has lost paying subscribers last quarter. Bumble has also seen marketing expense swell due to competition. Stock price is down >80% from its IPO in early 2021.
- Shein's potential IPO: Shein has told potential investors it is targeting a $90b valuation for its eventual US IPO. This is up from a $66b valuation from its funding round earlier this year.
🇸🇬 Singapore related
- Raffles Medical Group Tanks: The company posted a 67.4% YoY lower profit after tax of $12.4m in 3Q23. The healthcare company’s revenue likewise declined in 3Q23, dropping 24.6% YoY to $161.6m The company reported that the results were dampened by a discontinuation of Covid-19 activities, while cost inflation also eroded margins more than expected
- Gold Buying Spree: The World Gold Council (WGC) revealed that Singapore’s central bank was the third-largest buyer of gold in the world for the first nine months of 2023, after its counterparts in China and Poland. In a bid to provide downside protection to its currency and to diversify reserves, the Monetary Authority of Singapore (MAS) has bought four tonnes of gold on regulated gold exchanges in the third quarter of 2023, bringing its total purchases so far in 2023 to 75 tonnes.
