September 8, 2024

Notable market news this past week (1-Sep-24)

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

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China’s first open-market treasury bond trade in nearly two decades

• PBOC purchasing 100b yuan(US$14.1b) worth of short-term treasury bonds from primary dealers. This move is part of the central bank's strategy to stabilize the economy and manage the bond market amid slower economic growth
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• This net purchase aligns with the objectives set during the central financial work conference last October, where the PBOC emphasized the need for supportive monetary policies and countercyclical adjustments to boost the real economy. The announcement follows concerns about the viability of China's 2024 GDP growth target of around 5%, as economic data from the second quarter and July failed to inspire market confidence. Analysts predict further supportive measures, including potential cuts to banks' reserve requirement ratios, to help boost liquidity in the economy.
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• This move also comes amid expectations of an interest rate cut by the U.S. Federal Reserve, which may ease external pressures on the PBOC's policy decisions. The yuan saw gains, reaching a high against the U.S. dollar in 2024 following these developments

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☕️ Quick fire happenings to note

🌏 Global macro

• ‍Oil price tumbles: Oil was poised for the deepest weekly loss in almost a year on persistent concerns about soft demand and ample supply, even as OPEC+ delayed a planned increase in output by two months. Brent crude is down nearly 8%for the week. The producer group will not boost output by 180,000barrels a day in October and November, OPEC said in a statement, but kept its plan to revive 2.2 million barrels a day over the course of a year in place.
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• Europe EV troubles: Europe is stalling for time in the electric-car race as the region’s automakers struggle with the transition and politicians become wary of fuelling voter frustrations.Volkswagen and Volvo Car this week scaled back grand ambitions to challengeTesla and new Chinese rivals. The reasons for the setbacks are twofold: there are not enough affordable models to move past early adopters and the wealthy, and governments have scaled back sales incentives to further sap customer interest.While the path might be bumpy, there’s broad consensus that personal transport needs to shift away from fossil fuels to stem the worst effects of climate change
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• US nonfarm payrolls grew by 142,000: a number lower than the 161,000 expected by analysts. Despite the underwhelming job growth, the unemployment rate ticked down to 4.2%. Although job growth was modest, downward revisions for June and July's numbers reflected a weaker labour market than initially reported. The Fed, which has held interest rates steady since July 2023, is widely expected to begin cutting rates in its upcoming meeting, with markets split on whether the reduction will be 0.25% or 0.5%

🏦 Individual stocks/companies

• ‍Ilya Sutskever’s startup, Safe Super intelligence (SSI), raises $1b: valued at $5b, investors behind SSI include prominent venture capital firms such as Andreessen Horowitz, Sequoia Capital,DST Global, and SV Angel. SSI’s goal is to push AI capabilities beyond human intelligence while ensuring safety measures that prevent rogue AI from causing harm
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• Alibaba, JD.com results underscore the slowdown in Chinese consumer demand:The recent quarterly results from Chinese e-commerce giants Alibaba and JD.com have highlighted a significant slowdown in consumer demand within China. Both companies reported weaker-than-expected growth, with Alibaba's revenue from merchant commissions and advertising rising by only 1% in the quarter ending June 30, compared to 5% in the previous quarter. JD.com also noted a decline in average order value due to "soft consumer spending."
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• ‍Dell, Palantir, and Erie Indemnity to join S&P 500index: Dell, a server maker, Palantir, a data analytics firm, and Erie Indemnity, a property and casualty insurer, will replace American Airlines, Etsy, and Bio-RadLaboratories in the index. Following the announcement, Palantir's shares saw an 8% increase in extended trading, while Dell and Erie Indemnity experienced gains of 6% and 3%, respectively. On the other hand, shares of AmericanAirlines, Bio-Rad Laboratories, and Etsy dropped slightly in after-hours trading
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• Apple's upcoming iPhone will incorporate Arm's latest V9 chip: Apple's partnership with Arm, owned by SoftBank, is long-standing and includes a deal signed in 2023 that extends beyond 2040. Arm’s mobile phone chips are known for its low power consumption which helps batteries last longer.
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🇸🇬 Singapore related

• ‍Singapore and India deepen ties in semiconductor and digital technology: Both countries have signed a MOU, and this agreement aims to support India's growing semiconductor sector while facilitating the involvement of Singaporean companies in the Indian market. The MOU will foster collaboration between the two nations in areas such as ecosystem development, supply chain resilience, and workforce training

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