- Last week, consumer spending in August rose by 0.1% m/m, suggesting robust Q3 growth, easing fears of a spending cut due to a low personal saving rate.
- Core PCE deflator rose to 2.7% y/y in August, implying that inflation is moving towards the Fed's 2% target. This leaves room for the Fed to make another significant cut if the September payrolls report is disappointing.
- Regarding labor markets, strong ADP employment report, with a rise of 143k in private payrolls for September (surpassing consensus of 125k), the highest monthly increase since June, and slight rise in initial claims to 225k (consensus: 221k), which remains lower than early September levels, indicates resilient labor markets.
- Furthermore, ISM services index for September increased to its highest to 54.9 (consensus: 51.7) since February 2023, although the employment component fell to 48.1, which is in line with rise in initial jobless claims in the corresponding period.
- Besides that, it is to note that the escalating Middle East war could raise oil prices. Bloomberg Intelligence estimates that oil prices may hit $100/barrel, up from ~$74/barrel at time of writing. This would contribute add ~0.6% to global inflation and~ 0.7% to US inflation, thereby making it challenging to go ahead with rapid rate cuts.
- Nevertheless, we expect CSOPUMM to continue to deliver stable yield in the near term. As of 20241004, the fund has net yield at 4.91%. ^
Disclaimers
“The investment product(s), as mentioned in this document, is/are registered under section 286 of the Securities and Futures Act (Cap. 289) of Singapore (the “SFA”).This material and the information contained in this material shall not be regarded as an offer or solicitation of business in any jurisdiction to any person to whom it is unlawful to offer or solicit business in such jurisdictions. This document is not to be construed as recommendations to buy/sell any above-mentioned securities, or any securities in the above-mentioned sectors or jurisdictions.
CSOP Asset Management Pte. Ltd. (“CSOP”) which prepared this document believes that information in this document is based upon sources that are believed to be accurate, complete, and reliable. However, CSOP does not warrant the accuracy and completeness of the information, and shall not be liable to the recipient or controlling shareholders of the recipient resulting from its use. CSOP is under no obligation to keep the information up-to-date. The provision of this document shall not be deemed as constituting any offer, acceptance, or promise of any further contract or amendment to any contract. The information herein shall not be disclosed, used or disseminated, in whole or part, and shall not be reproduced, copied or made available to others without the written consent of CSOP.
Advice should be sought from a financial adviser regarding the suitability of the investment and/or investment product before making an investment. Investment involves risk. The value of investments, and the income from them, can go down as well as up and an investor may get back less than the amount invested. Past performance is not necessarily indicative of future performance. Investor should read the prospectus and product highlights sheet, which can be obtained on CSOP website or authorized participating dealers, before deciding whether to invest. This document has not been reviewed by the Monetary Authority of Singapore.”
Comments