October 20, 2024

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Notable market news this past week (20-Oct-24)

Here is the Skeptivest roundup of the latest market headlines for the week

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🌎 Demographic shifts signal investment opportunities

Age of aging: Morgan Stanley’s strategists have proclaimed that “the age of aging is here,” highlighting a significant demographic shift where the number of centenarians will reach one million across five regions by 2030. They project that by 2060, the ratio of individuals over 65 to those of working age will at least double in most G20 nations, impacting health systems, employment, and pension schemes.

20 key stocks to capitalize on the trend: In light of these changes, Morgan Stanley identifies 20 key stocks poised to benefit from the aging trend, including Novo Nordisk and Eli Lilly, which have collectively risen 57% since the beginning of 2023. However, JPMorgan analysts warn that while elderly investors may shift their portfolios toward bonds, this could still lead to rising borrowing costs due to decreasing household savings and strained government budgets.

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☕️ Quick fire happenings to note

🌏 Global macro

• Malaysia unveils US$98b record budget: The government aims to reduce the fiscal deficit to 3.8% of GDP in 2025, down from the current 4.3%. New measures include 1) petrol subsidy cuts for top 15% earners, 2) minimum wage increase, 3) expanded Sales and Service Tax. Read the full article here‍
• High time for IPOs according to Blackstone: Rate cuts the world over have already helped spur a dealmaking flurry at Blackstone. The firm invested US$34b this past quarter, more than any quarter in the past two years. Blackstone isn’t alone in sizing up a rebounding market — major PE players like BC Partners and Carlyle have also been moving to list larger companies in their portfolios‍
• OPEC cuts oil demand growth for 2025: OPEC in a monthly report said world oil demand will rise by 1.93 million barrels per day (bpd) in 2024, down from growth of 2.03 million bpd it expected last month. China accounted for the bulk of the 2024 downgrade. While government stimulus measures will support fourth-quarter demand, oil use is facing headwinds from slowing economic activity and moves towards cleaner fuels‍
• ECB delivered its third interest rate cut this year: as inflation risks eased faster than expected. The central bank lowered rates by 25bps at its October meeting. It comes after inflation cooled to 1.8% in September, below its 2% target
• Kamala Harris questions Trump's fitness for Office: Vice President Kamala Harris leveraged Donald Trump’s cancellation of planned media appearances to question his capacity to manage the demands of the Oval Office, reigniting concerns over his age and fitness for leadership. She noted reports of exhaustion from his team and emphasized that the presidency is one of the most challenging roles, prompting inquiries about Trump’s readiness for the position.

🏦 Individual stocks/companies

• Netflix (+5.36% past 5 days) posted third quarter earnings beat: ad-tier memberships jumped 35% QoQ and accounted for more than 50% of sign-ups during the third quarter. The company is projecting a US$43b revenue in 2025 as it seeks to improve its core series and films offerings and invests in new initiatives such as ads and gaming
• Historic milestone for SpaceX as it made its first rocket catch: SpaceX launched its fifth test flight of its Starship rocket and made a dramatic first catch of the rocket’s more than 20-storeys tall. The Starship system is designed to be fully reusable and aims to become a new method of flying cargo and people beyond Earth. SpaceX won a multibillion-dollar contract from NASA to transport their astronauts to the moon
• Starbucks taps on former Chipotle executive: Starbucks is appointing Tressie Lieberman as global chief brand officer, a newly created position under Brian Niccol, the newly-appointed CEO of Starbucks after he left Chipotle. The coffee chain faces a slump in sales for the past three quarters and Lieberman was brought in for her strong brand building expertise in hopes to revive its sales
• Uber exploring acquiring Expedia (+5.85% past 5 days): This would be Uber’s largest-ever acquisition, but The FT reports that interest is still in the “early stages.” Maybe potential travel benefits could make Uber One actually worth it.
• ASML (-13.92%) accidentally released earnings a day early and disappoints: U.S. and European shares of the chip designer and manufacturer had their worst day ever on Tuesday, thanks to reduced FY’2025 revenue guidance.

🇸🇬 Singapore related

• Tanjong Katong Complex put up for sale: Successful bidders will win a 30 year lease. In 2021, SLA announced that the complex would be closed for major upgrading from the second half of 2023. Since then, SLA and other agencies have studied different options and decided to put the building up for sale. The tender will close on Feb 25, 2025