To The Moon

Last Week's Recap

The US Market - Crude oil prices rallied to fresh 2023 highs

• Stocks fell sharply last Friday in a quarterly episode known as triple of derivatives contracts tied to stocks, index options and futures matured on Friday.

• However, investors wrapped up a volatile week ahead of the Federal Reserve’s policy meeting. The S&P 500 and Nasdaq both suffered a second straight week of losses, while the Dow closed out a positive week.

• Inflation posted its biggest monthly increase this year in August as consumers faced higher prices on energy and a variety of other items. August CPI was up 3.7% for a year ago, amid a jump in oil and gas prices. However, Core CPI, excluding volatile food and energy, increased 4.3% on a year-over-year basis.

• The Dollar Index ended its 9th straight weekly gain for the first time since Oct. 3, 2014.

• Oil prices hit highs this year last Friday. Both WTI and Brent crude oil futures finished the week up more than 4%, registering the third straight positive week for both.

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The US Sectors & Stocks - ARM surged 25% in its trading debut

• Utilities stocks have outperformed last week, putting the S&P 500 sector registered a more than 3% gain. Duke Energy (DUK) and Southern Company (SO) are the biggest winners in the sector, up more than 4% for the week.

• Information technology was the worst-performing sector in the S&P 500, down more than 2%.

• Chip equipment stocks fall as TSMC reportedly asks suppliers to delay deliveries, citing customer demand fears. Chips stocks fell on the news. The semiconductor ETF (SMH) dropped more than 2% last week.

• Apple (AAPL) fell after the surprise-free event. The giant introduced its iPhone 15 series smartphones and Apple Watch Series 9 smartwatches.

• Chip designer Arm (ARM) jumped 25% in its trading debut Thursday, after its IPO priced at $51 a share, the high point of its expected range. Wall Street analysts questioned ARM's high valuation given its current lack of sales growth.

• Tesla (TSLA) surged 10% for the week, as Morgan Stanley Raises Price Target to $400.

• Adobe (ADBE) shares fell 3.4% on the back of the company’s fiscal third-quarter earnings report Thursday. Earnings and revenue beat analysts’ estimates and forward guidance matched Street projections. Analysts were hoping for a bigger sales boost from Adobe's new Firefly generative AI offerings.

• American Airlines (AAL), Spirit Air (SAVE) and Delta Air Lines (DAL) slashed their earnings outlooks, warning the surge in jet fuel prices will bite into results.

• Netflix (NFLX) fell after CFO Spence Neumann said the internet television network won't see a near-term sales and earnings lift from its advertising-supported service levels. He also said operating margins will increase slower than expected.

• Unity (U) shares dropped after the app-monetization and game-engine company introduced new fees based on how often a developer’s game is downloaded.

Hong Kong Market - HSI closed flat after China cut banks’ reserve requirement ratio

• Hong Kong stocks rose by the most in about two weeks after China’s central bank cut banks’ reserve requirement ratio for a second time this year to inject more liquidity into the system. Official reports showed the nation’s economic recovery strengthened.

• The Hang Seng Index reduced the loss for the week to 0.1%. The Tech Index lost 0.34%.

• Industrial production in China rose 4.5% in August from a year earlier while retail sales increased 4.6%, the statistics bureau said on Friday, both exceeding market consensus.

• Overseas investors sold20 billion yuan of Chinese stocks via the Stock Connect month to date, according to exchange data.

Singapore Market - STI was up 2.3%

• The Straits Times Index (STI) gained 1% to 3,280.69 on Friday amid a lifting of sentiment across regional markets as Chinese economic data beat expectations. For the week, the STI ended up 2.3%.

• Grab Holding (GRAB) fell 4.5% following an announcement that Singapore's Land Transport Authority will investigate the supply of taxi and ride-hailing services as part of a review of the point-to-point industry structure and regulatory framework.

• Singapore’s labour demand is set to ease further in the rest of 2023, after employment growth and job vacancies moderated in the second quarter, based on the Ministry of Manpower’s (MOM) Labour Market Report on Thursday (Sep 14).

Australian Market - Miners stocks were the outperformers

• The Australian share market rose in broad gains on Friday after better-than-expected Chinese and US data boosted optimism about the health of the global economy. The benchmark S&P/ASX 200 Index ended the week 1.7% higher.

• Miners, from gold to lithium and iron ore, were the clear outperformers. Heavyweights Rio Tinto, BHP and Fortescue Metals vaulted after the price of iron ore price jumped to the highest in six months.

• Qantas defied another blow by the competition watchdog. The ACCC has denied Qantas the right to tie up with China Eastern Airlines, saying the collaboration would give the airline too much power to drive up prices.

The Week Ahead

Macro Factors - FOMC will be in focus

• Monetary policy will be in focus this week, as the Federal Reserve and other major central banks announce interest-rate decisions. Purchasing managers' indexes, housing data, and Instacart's highly anticipated initial public offering will be other highlights.

• The Federal Open Market Committee concludes a two-day meeting on Wednesday. Futures markets are overwhelmingly pricing in no change in the fed-funds rate, currently at 5.25%-5.50%. More attention may be paid to Fed officials' updated Summary of Economic Projections.

• On Thursday, the Bank of England is expected to raise its target interest rate by a quarter of a percentage point, to 5.5%. Then, on Friday, the Bank of Japan is likely to keep its rate unchanged, at negative 0.1%. Last week, the European Central Bank raised its target interest rate for a 10th-straight time, by a quarter of a point, to 4%.

• On Tuesday, the parent company of online grocery-delivery service Instacart is expected to begin trading under the ticker CART. Instacart raised its IPO price range Friday after Arm’s debut.

• On the earnings front, FedEx is set to report Wednesday, giving investors insight into the health of the supply chain. General Mills also reports on that day.

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