The cost behind underestimating Inflation...
Last week, the OPEC had agreed to ramp up the crude oil production in the coming 2 months as the ban on Russian oil persisted. That had enlightened the global energy market and pushed the Thursday's stock markets to rally. But that seemed a little short-lived as the worry of heading for another recession continued to linger... especially the news of Tesla CEO Elon Musk sending email to all the employees about 10% head count reduction on Friday, rekindled the unemployment concerns whether recession could become unavoidable. In actual fact, any decline in economic activities can trigger companies to cut costs ahead of any possible dropping demands.
Oil prices dropped more than 2% following a report that Saudi Arabia is prepared to raise crude production if Russia's output significantly falls under European Union sanctions.
Source ： www.cnbc.com
Another noteworthy point was the remarks from the US Treasury Secretary Janet Yellen on her misjudgement on inflation last year, giving signal about the inflations may continue to stay high in the near future and this will inevitably weaken the spending power of consumers.
🌀 Focus Point: Investors need to take note of the commodities are the most positively correlated with inflation. During COVID in the last 2 years, quantitative easing measures needed to be in placed to rescue the economies from collapsing, the increase supply of money had almost pushed the cost of money to zero to keep all businesses going. And today, reversing this off-balance market situation back to a healthy level, the forex markets will be for sure one of the first few to feel the commotions. In fact, some of you may start to feel the tension right now whenever the US stock markets are retreating, and the U.S. dollar is gaining strength against other currencies elsewhere. Today, these strenuous relationship is almost instantaneous with the surging commodities price whenever the situations get intensify at the Russia-Ukraine war or the EU-Russia sanctions.
Treasury Secretary Janet Yellen says she was wrong about inflation. "I was wrong about the path inflation would take," Yellen said in an interview that aired Tuesday on CNN. Bloomberg's Annmarie Hordern reports on "Bloomberg The Open."
Source : www.youtube.com
"Well, look, I think I was wrong then about the path that inflation would take," Yellen said Tuesday. "As I mentioned, there have been unanticipated and large shocks to the economy that have boosted energy and food prices, and supply bottlenecks that have affected our economy badly that I didn't at the time didn't fully understand. But we recognize that now."
China issues policy package to stabilize economy
"On May 31, 2022, China's State Council released a set of 33 measures in a document titled Policy Measure Package to Stabilize the Economy (“the policy package”), covering a wide range of mechanisms aimed at supporting businesses impacted by the COVID-19 pandemic."
For investors who are active in HK market, should know by now that 20,000 points level is the unbreakable level because crossing this critical breaking point confirmed the entering of recession. With the China government giving its utmost support to Hong Kong, it had issued a comprehensive stimulus package last week to give its best effort in pulling the economies out of the woods, investors can watch closely whenever HSI falling back to 20,000 support level again for buying opportunities.
On May 31, 2022, China’s State Council released a set of 33 measures in a document titled Policy Measure Package to Stabilize the Economy (“the policy package”), covering a wide range of mechanisms aimed at supporting businesses impacted by the COVID-19 pandemic. The policy measures were first introduced during a routine State Council meeting on May 23.
Source : www.china-briefing.com
Focus Point : Blockchain, NFTs and the Metaverse
Besides Tesla CEO Elon Musk who admitted in owning a crypto portfolio and continued in showing his supports... there are many other famous crypto investors that still hold on to their digital money. It may not be absolutely related, but today investors should be vigilant enough to pick up information like checking on the crypto holding of individual companies if any, and its CEO to decide whether the company performance is insulated from the fluctuation of bitcoins.
JP Morgan has reiterated its view that US$38,000 is a fair price for bitcoin, 20% higher than the digital asset’s value at press time. The investment bank’s strategist last provided the fair value estimate in February.
Source : www.theedgesingapore.com
Other Focus (Results and Highlights of Corporate Actions):
ESR-LOGOS REIT prices $150 mil worth of subordinated perpetual securities with 5.50% p.a. coupon
OCBC prices $500 mil worth of perpetual capital securities with 3.90% coupon
Fed's Bullard sees 3.5% rates setting up cuts in 2023 or 2024
ComfortDelGro's Australian subsidiary wins bid to operate bus services in Darwin
Sunseap partners Huawei to generate solar energy efficiently for Singapore
Elon Musk wants to cut 10% of Tesla jobs, has 'super bad feeling' about economy
Facebook parent Meta COO Sheryl Sandberg is stepping down
Amazon announces 20-for-1 stock split
The Hour Glass to acquire freehold property in Brisbane for $81.4 mil
EC World REIT's refinancing raises concerns despite analysts' upbeat report
YTL Power acquires Hyflux's Tuaspring power station for S$270m in cash
Singtel partners Lendlease to transform Comcentre HQ into $3 bil next-gen landmark development
MAS-licensed Green Link Digital Bank has begun its banking business in Singapore
(6th Jun) China Construction Bank Singapore issues $350 million infrastructure bond
(6th Jun) Lawrence Wong promoted to DPM, to be acting PM in PM Lee's absence
(6th Jun) CLP Signs MoU with ESR For Developing Sustainable Data Centre Projects
(6th Jun) Temasek launches investment subsidiary GenZero, focused on decarbonisation
(6th Jun) Ant Group soft launches its digital wholesale bank in Singapore
(6th Jun) Credence Partners sells entire stake in Kim Heng to Hildrics Capital at 10.5 cents each
6th June: Amazon stock to trade on a 20-for-1 split-adjusted price
Coming Market Focus (Extract):
Sunday, June 5, 2022 | |
CNY | Caixin Services PMI, May |
Monday, June 6, 2022 | |
Holidays | New Zealand, South Korea, Switzerland, Norway |
Tuesday, June 7, 2022 | |
AUD | RBA Interest Rate Decision, Jun |
SGD | Foreign Reserves USD mom May |
USD | Exports, Imports, Trade Balance Apr |
USD | API Weekly Crude Oil Stock |
JPY | GDP qoq yoy q1 |
Wednesday, June 8, 2022 | |
USD | Crude Oil Inventories |
CNY | Exports, Imports, Trade Balance May |
EUR | GDP qoq yoy Q1 |
Thursday, June 9, 2022 | |
EUR | ECB Interest Rate Decision Jun, ECB Monetary Policy Statement |
CNY | CPI mom May, CPI yoy May, PPI yoy May |
USD | Initial Jobless Claims |
Friday, June 10, 2022 | |
USD | CPI, Core CPI mon yoy May |
USD | Federal Budget Balance May |
Investment Tips 💡 this month (June 2022🦉:)
STI continued to hover at 3200 critical level. Meanwhile I'm still holding a bearish view on the overall markets, and prefer to take short-term profit if happen to buy at low. However, I don't expect much of any sudden big drop in any major indexes but rather, the oil and gas prices may surge to another new high (probably more missile launches in North Korea, or Russia-Ukraine war may become worsen) and conflicts of interests amongst countries, especially over food or any form of natural resources, will likely get intensify and drag down the pace of the global economic recovery.
Number of new Bonds had been pushing out for launch in the market with higher coupon rate since the mid of May, and therefore we need to be watchful with our debt financing as the interests on bank loans is expected to increase soon in this quarter.
Tesla, which has electric vehicle factories in the United States, China and Berlin, employs around 99,290 staff worldwide, so culling 10 per cent of jobs could equate to losses approaching 10,000 ...
Source : www.straitstimes.com
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