Your bite-sized weekly update (3 July)

By Beansprout • 03 Jul 2022 • 0 min read

Looking for safe havens amidst growing recession concerns (3 July)

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What happened in the past week?

Stock market update
Source: Bloomberg. Weekly price change as of market close on 1 July

A recession to tame inflation

You know that a recession is likely on the horizon when everyone is talking about it.

It is not a surprise that worldwide Google searches for “recession” have hit a record high. 

This week, Cathie Woods of ARK fame also joined the chorus of well-known personalities in saying that “the US is already in recession.”

Indeed, the Atlanta Fed’s running estimate of GDP growth in the US is pointing to a 2.1% quarterly decline in the US GDP in 2Q. This would follow a 1.5% quarterly decline in the previous quarter, which would put the US economy in a technical recession. 

With the gloomy economic outlook, what many people are looking out for is probably a safe investment that allows us to protect our savings against inflation. 

Here, the good news is that the latest issuance of the Singapore Savings Bonds (SSBs) just got better with a 10-year average interest rate of 3.00%, the highest in history.

Be sure to read Why we like the latest Singapore Savings Bonds (SSBs) - July 2022! 

In other news….

In the US

🌱 Tesla (TSLA) is closing a Silicon Valley office and laying off 200 workers, according to people familiar with the matter who spoke to the Wall Street Journal. 

🌱 Pfizer (PFE) and BioNTech (BNTX) signed a $3.2 billion deal with the U.S. government to provide 105 million doses of their Covid-19 vaccine.

🌱 Pinterest (PINS) co-founder Ben Silbermann stepped down as CEO and will be replaced by Bill Ready, who had been president of commerce at Google.

🌱 Micron (MU) reported a lower-than-expected sales outlook, stemming from weakening overall demand.

🌱 FedEx (FDX) delivered an upbeat earnings forecast.

🌱 FTX CEO Sam Bankman-Fried said that it is not in talks to acquire Robinhood. 

In China

🌱  China reduced quarantine times for inbound travelers by half, the biggest shift yet in a Covid-19 policy. 

🌱  China announced another stimulus measure (~US$45b) to finance infrastructure projects, part of its push to drive investment and increase employment 

🌱 Nio (NIO) denied accounting allegations in a report by short seller Grizzly Research LLC, which said the Chinese electric-vehicle maker is playing “accounting games to inflate revenue and boost net income margins to meet targets.”

In Singapore

🌱 Singapore Q2 private home prices rose 3.2% compared to the previous quarter on a 6% jump in prices of city-fringe condos.

🌱 Singtel (STEL) clarified that it has no plans to list Optus through an IPO at the moment, after The Australian reported that Singtel is looking to float its Aussie unit.

🌱 Keppel Infrastructure and Keppel Infrastructure Fund Management have signed a non-binding term sheet for the sale and purchase of a 50% equity stake in Marina East Desalination Plant.  

🌱 The managers of ARA US Hospitality Trust (ARAU) are proposing to sell four Hyatt Place hotels for a total consideration of US$32.5 million ($45.2 million).

Source: Bloomberg, CNBC, Marketwatch, The Business Times

What to look out in the week ahead

It’s another short trading week in the US, with the Independence Day holiday on Monday (4 July).

On the macro front, investors will be looking out for the FOMC meeting minutes on Wednesday (6 July), ADP private payrolls report on Thursday (7 Jul) and Nonfarm payrolls report on Friday (8 July)

Levi Strauss will be reporting its second-quarter earnings on Thursday (7 July), and could offer investors an early preview of what to expect in the upcoming earnings season. 

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