Market Update for14 - 20 Mar 2023
Market forecast for 4th Week of March
extraordinary week
Global Banking Crisis
Collapse : Silvergate Capital
9 Mar 2023: The cryptocurrency-focused US lender Silvergate is to wind down its operations after it was hit by customer withdrawals following the collapse of crypto exchange FTX
Collapse : Silicon Valley Bank
On Friday, March 10, 2023, Silicon Valley Bank, Santa Clara, CA was closed by the California Department of Financial Protection & Innovation which appointed the Federal Deposit Insurance Corporation (FDIC) as Receiver. After the bank was forced to sell bonds at a loss, its stock price plummeted and depositors panicked, leading to a classic bank run.
Collapse : Signature Bank
Regulators shuttered Signature Bank on March 12 after its depositors had withdrawn billions following the collapse of SVB, another regional bank, two days prior.
Rescued : First Republic Bank
First Republic becomes the latest bank to be rescued, this time by its rivals. A customer exits a First Republic Bank branch in Manhattan Beach, Calif., on March 13, 2023. The midsized lender was rescued by a group of top banks after suffering an exodus of depositors following the collapse of two U.S. banks. [link]
Takeover : Credit Suisse
UBS agrees to buy Credit Suisse in Swiss-assisted bid for US$3.23 billion to calm markets
Who's Next?
Past Economic Events to note last week:
➡️Singapore, Indonesia sign MOU to develop renewable energy for domestic use and export
➡️Singapore’s February NODX falls by 15.6%
Banking ➡️Credit Suisse’s AT1 wiped out but equity holders to receive UBS shares ➡️UBS to buy Credit Suisse in US$3.3 billion deal
➡️Credit Suisse to continue operating in Singapore with 'no interruptions or restrictions': MAS
➡️ECB delivers half-point hike but gives no signs on next move ➡️Yellen seeks to reassure congress on banks amid oversight angst
➡️Global headwinds and slower growth may weigh on labour demand going forward, says MOM
➡️China Central Bank Cuts RRR to Boost Economy
(RRR: Reserve Requirement Ratio; The amount of cash that banks must hold as reserves)
Future Events to note next Week:
➡️22 Mar; US's FED Interest Rate Decision, CPI
➡️23 Mar; SGD's CPI
➡️24 Mar; SGD's Industrial Production
Week after Next*** :
➡️30 Mar; US's GDP
➡️30 Mar; China's Manufacturing PMI
➡️31 Mar; US's Core PCE Price Index
Market Forecast:
Last week, the stock market was chaotic with the collapse of banks, all happened one after another. And the failure of Silicon Valley Bank, SVB, is the largest since the Washington Mutual went bust in 2008. If you wondered what actually happened resulted the bank to collapse, I suggested you to google search under "MBS vs CDO". As CDO was the culprit behind the financial crisis in 2008, and the following summarize what happened back then :
KEY TAKEAWAYS
The 2007–2008 financial crisis developed gradually. Home prices began to fall in early 2006.
In early 2007, subprime lenders began to file for bankruptcy.
In June 2007, two big hedge funds failed, weighed down by investments in subprime loans.
In August 2007, losses from subprime loan investments caused a panic that froze the global lending system.
In September 2008 Lehman Brothers collapsed in the biggest U.S. bankruptcy ever.
When the bubble burst, financial institutions were left holding trillions of dollars worth of near-worthless investments in subprime mortgages.
The 2008 financial crisis began with cheap credit and lax lending standards that fueled a housing bubble. When the bubble burst, the banks were left holding trillions of dollars of worthless investments in subprime mortgages. The Great Recession that followed cost many their jobs, their savings, and their homes. (sourced from Investopedia)
Back to the present, what happened in 2023 so far is worrisome to many investors wondering if there's more banks at the brink of collapse. By and large, STI had been rebounding from the bottom of 3096 points and the current resistance level is at 3184 points. Investors need to take a short term views now on the market for this week. And I believed STI will try to fill the gap between 3184 and 3210, but it may not be easy to trend higher since the market is still very uncertain as all waiting for FOMC interest rate decision to be announced on Wednesday night (Singapore Times).
In short, this week is good to long, as long as there's any pull back in the market. But keep it short, take profit and go if there's any... the entire correction is far from over.
My latest Market View published in ZaoBao in the month of March 2023:
Interviewed on Morning Summary Update @ ZaoBao dated on 17 Mar 23 :
Interviewed for Market Summary dated on 18 Mar 23 :
🌀SG Earning Announcement🌀
Watch out for the First Quarter Earning reporting season in Apr-May 2023...
FUTURE
🌀 Highlights of Economic Calendar: 20 - 25 Mar 23 🌀
| Mon 20 Mar 23 | Tue 21 Mar 23 | Wed 22 Mar 23 | Thu 23 Mar 23 | Fri 24 Mar 23 |
|---|---|---|---|---|---|
Singapore | | | | CPI | |
United States | | Existing Home Sales | Fed Interest Rate Mtg CPI | Initial Jobless Claims * and more | Manufacturing PMI * and more |
China | | | | | |
Hong Kong | | | Interest Rate Decision | CPI | |
Australia | RBA Meeting Minutes | | | | |
Britain | | | CPI | | |
Japan | | | | CPI | |
See below for more important data to be announced:
Sun , 19 Mar 23 CNY : PBoC Loan Prime Rate : 3.65% to 3.65%
Mon, 20 Mar 23 USD : Reserve Balances with Federal Reserve Banks : 3.004T to ?
AUD : RBA Meeting Minutes
AUD : Export/Import/Trade Balance
Tues, 21 Mar 23 USD : Existing Home Sales mom Feb -0.7% to ?
USD : API Weekly Crude Oil Stock : 1.155M to ?
Wed, 22 Mar 23 USD : FED Interest Rate Decision 4.75% to ?
USD : Crude Oil Inventories : 1.550M to ?
GBP : CPI yoy Feb : 10.1% to ?
HKD : Interest Rate Decision 5.00% to ?
Thu, 23 Mar 23 SGD : Core CPI yoy Feb : 5.50% to ?
SGD : CPI yoy Feb : 6.6% to ?
HKD : CPI yoy Feb 2.4% to ?
USD : Initial Jobless Claims : 192K to ?
USD : New Home Sales Feb 670K to ?
JPY: National CPI yoy Feb 4.3% to ?
Fri, 24 Mar 23 SGD : Industrial Production yoy Feb : -2.7% to ?
SGD : Industrial Production mom Feb : -1.1% to ?
USD : Core Durable Goods Orders mom Feb : 0.8% to ?
USD : Manufacturing PMI Mar : 47.3 to ?
USD : S&P Global Composite PMI : 50.1 to ?
USD : Service PMI Mar : 50.6 to ?
PAST
🌀 Things to note of past Economic Calendar: 13 - 17 Mar 23 🌀
Mon, 13 Mar 23 USD : CB Employment Trends Index : 118.14 to 118.29
AUD : Westpac Consumer Sentiment Mar : -6.9% to 0.0%
Tues, 14 Mar 23 SGD : Unemployment Rate 4Q : 2.1% to 2.0%
USD : OPEC Monthly Report
USD : Core CPI yoy Feb : 5.6% to 5.5% USD : CPI yoy Feb : 6.4% to 6.0%
USD : API Weekly Crude Oil Stock : -3.835M to 1.155M
GBP : Unemployment Rate Jan : 3.7% to 3.7%
CNY : Industrial Production yoy Feb : 1.3% to 2.4% CNY : Chinese Unemployment Rate Feb : 5.5% to 5.6%
CNY : Retail Sales yoy Feb : -1.8% to 3.5%
Wed, 15 Mar 23 USD : Core PPI mom Feb : 0.1% to 0.0%
USD : PPI mom Feb : 0.3% to -0.1%
USD : Core Retail Sales mom Feb : 2.4% to -0.1%
USD : NY Empire State Manufacturing Index Mar : -5.80 to -24.6%
USD : Retail Sales mom Feb : 3.2% to -0.4%
USD : Crude Oil Inventories : -1.694M to 1.550M
AUD : Employment Change Feb : -11.0K to 64.6K
CNY : House Prices yoy Feb : -1.5% to -1.2%
Thu, 16 Mar 23 SGD : Non-Oil Exports mom Feb : 0.90% to -8.00%
SGD : Non-Oil Exports yoy Feb : -25.00% to -15.60%
SGD : Trade Balance : 6.276B to 6.708B
HKD : Unemployment Rate (Feb) 3.4% to 3.3%
USD : Initial Jobless Claims : 212K to 192K
USD : Housing Starts mom Feb : -2.0% to 9.8%
USD : Building Permits mom Feb : 0.1% to 13.8%
USD : Philadelphia Fed Manufacturing Index : -24.3 to -23.2
USD : Import Price Index mom Feb : -0.4% to -0.1%
USD : Export Price Index mom Feb : 2.2% to -0.8%
Fri, 17 Mar 23 USD : Industrial Production mom Feb : 0.3% to 0.0%
USD : Manufacturing Production mom Feb : 1.3% to 0.1%
EUR : CPI yoy Feb : 8.6% to 8.5%
📌
Other Focus (Highlights of Results / Corporate Actions):
Local news:
GIC, Temasek take stakes in payment processor Stripe's US$6.5 bil Series I
EMA grants Keppel Energy conditional approval for Cambodia renewable energy import project
Boustead Projects to be delisted after losing free float
ThaiBev says there are ‘no concrete plans’ made to list or sell its spirits business
Digital Core REIT says it is not exposed to US regional banks
Manulife US REIT's manager confirms it is in discussions with Mirae Asset
Ho Bee Land disposes its properties at Tannery Road and Tannery Lane for $115 mil
Lim of CSE Global and Kuok of Wilmar raise respective stakes
Earning Results:
SIA group wide load factor for Feb was 86.6%, down 0.3% over Jan
Vicplas reports 1HFY2023 earnings of $2.5 mil, 67.9% down y-o-y
Other News
Baidu soars after analysts give Ernie a thumbs-up after test-run
Baidu plunges after recorded demo of AI chatbot disappoints
Hutchison Ports announces investment in Egyptian port projects of US$700 mil
📌
SGX & Other Newsfeed
💡 SGX <Analyst Research>
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