Your bite-sized weekly update (27 Aug)

By Beansprout • 27 Aug 2022 • 0 min read

Jerome Powell causes stocks to tank, Grab disappoints again, Singtel looking up

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THIS WEEK IN MARKETS

For the whole week, investors were just waiting for one man to speak.

And when Fed Chairman Jerome Powell said that the Fed will act “forcefully” against inflation and “keep at it for some time”, the sell-off in the markets was fast and furious. 

After all, some investors were expecting the Fed to pivot, or reverse its aggressive interest rate hikes. That unfortunately did not happen. 

Bloomberg did a calculation of how much Friday's fall in the US market eroded the wealth of America's richest people - that's $78 billion in total. 

Elon Musk saw $5.5 billion wiped out from his wealth. Jeff Bezos lost $6.8 billion. The fortunes of Bill Gates and Warren Buffett fell by $2.2 billion and $2.7 billion, respectively.

Apart from these billionaires, the other person whose wealth has been coming down is Grab's CEO Anthony Tan. Grab's share price fell after its recent second quarter results, which we take a deeper look at in this week's feature story. 

IMPORTANT

Stock market update
Source: Bloomberg. Price as of market close on 26 Aug
  • Uh-oh, the Fed is not pivoting. Federal Reserve Chair Jerome Powell reiterated that the US central bank will keep raising interest rates and probably leave them elevated for a while to reduce inflation.

  • More spending please. China stepped up its economic stimulus with a further 1 trillion yuan ($146 billion) of funding largely focused on infrastructure spending. 

  • Easing tensions? The US audit regulator said it has signed an agreement with Chinese regulators in a step forward towards inspecting and investigating registered accounting firms in China and Hong Kong.
  • Mask-off. Singapore's Prime Minister Lee Hsien Loong announced that mask wearing will become optional in most indoor settings, marking a further step forward in Singapore’s re-opening. Read more about how this might affect the Singapore retail, hospitality and aviation sectors here. 

ICYMI

  • Tesla completed a 3-for-1 stock split, its second stock split in two years. 

  • Palo Alto Networks reported better than expected earnings and issued an upbeat forecast. The company also announced that its board of directors had approved a 3-for-1 stock split. 

  • Peloton struck a partnership to sell fitness equipment and apparel on Amazon. This will mark Peloton’s first partnership with another retailer to sell its merchandise. 

  • Xiaomi posted a steep decline in second-quarter revenue as China's smartphone market shrank, hit by strict COVID-19 restrictions.

  • Singtel has reported a net profit of $628 million for the 1QFY2022 ended June, 41.3% higher y-o-y. The improvement was due to better operational performance and a net exceptional gain from Airtel. Separately, Singtel will be selling 198 million shares it owns in Bharti Airtel to Bharti Telecom for a consideration of $2.25 billion.

  • SGX expects more US-listed Chinese firms to list in Singapore. There could be more fund-raising if valuations are supportive. But if they are not conducive, it will be a technical secondary listing.

Source: Bloomberg, CNBC, Business Times, Edge Singapore

THE BIG IMPORTANT STORY

Why did Grab’s share price plunge despite the “strong” results and should you buy the dip?

Grab will need to show a clearer path to profitability.

Grab share price

WHAT’S UP THIS WEEK

Monday, 29 Aug 

  • US: Pinduoduo’s earnings

Tuesday, 30 Aug 

  • US: Baidu Inc, Futu Holdings, iQIYI’s earnings

Wednesday, 31 Aug

  • China: Manufacturing PMI

Friday, 2 Sep

  • US:  Non farm payroll

Get the full economic and Singapore earnings calendar on the SGX Academy

Source: SGX, Bloomberg, Refinitiv

THAT’S INTERESTING

  • Anything for Musk. Fans and investors are flocking to the area near Elon Musk's SpaceX launch site, bringing both opportunity and angst for locals. Residents routinely gets text messages from strangers asking if they would like to sell their apartments with a direct view of Elon Musk’s Texas spaceport. (Source: Bloomberg)
Anything for Musk
  • Sushi, please. The Japanese government is moving to start accepting overseas tourists who do not want to take guided tours in a bid to address a decline in the numbers of foreign travelers. The country reopened to foreign holidaymakers in June, but all tourists are currently required to join guided tours. (Source: NHK)

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