To The Moon

• Last week, Fed’s June FOMC meeting minutes were released and revealed a more dovish economic analysis, based on recent data on inflation and labor markets.

• This was supported by the initial jobless claims for 29th June rising to 238k, slightly higher than the consensus of 235k, and seem to be settling at a higher range than earlier this year. Furthermore, continuing claims for week ending 22nd June rose to 1858k (vs 1832k prior), the highest since November 2021, indicative that unemployed workers find it hard to get new jobs.

• Besides that, composite services ISM fell to 48.8 in June, its lowest since the 2020 recession. This is the second time this year where it has fallen into contractionary territory, which is rare in its 28-year history, and a signal that the economy’s post-pandemic growth engine has started to lose steam.

• However, it is worth noting that there are other signals that could interrupt the dovish trend, such as the May JOLTS report featuring an unexpected rise in job openings to 8140k, against a consensus of 7946k, interrupting a likely ongoing gradual cooling trend in labor demand.

• Taking all into account, we expect CSOPUMM to continue to deliver stable yield in the near term. As of 20240705, the fund has gross yield of 5.56% and net yield at 5.21%. ^

Source: CSOP, Department of Labor, Bloomberg, as of 20240705. ^ Gross yield is based on annualized yield of underlying holdings. 7-day net yield is calculated based on calendar days and NAVs in 5-decimal.

Disclaimers

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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.”