Your bite-sized weekly update (30 July)

By Beansprout • 30 Jul 2022 • 0 min read

Big tech results, SIA and iFast's mixed fortunes & Fed rate hike

Weekly sprout image

In this article

0 min read

THIS WEEK IN MARKETS

It’s been a busy week of results, and what surprised us was the divergence in company fortunes.

Amazon is “seeing revenue accelerate”, Apple’s iPhone sales continue to grow but Meta saw its first ever revenue drop.

Singapore Airlines reported its second highest quarterly profit on soaring travel demand, while iFast swung into a loss with writedowns in India. 

It seems like some companies are coping with high inflation and changes in consumer spending better than others.   

Warren Buffett once said “Only when the tide goes out do you discover who’s been swimming naked”.
 
Likewise, we should be asking ourselves: What are you doing to make your portfolio resilient in both good and bad times?

IMPORTANT

Weekly wrap 31 Jul.png
Source: Bloomberg. Weekly price change as of market close on 29 July

 

  • Fed raises interest rates. The Fed raised benchmark interest rates by 0.75 percentage points as expected. Fed Chairman Jerome Powell’s comment that “another unusually large increase could be appropriate but it’s dependent on data between now and then” was taken by investors that the Fed might be less aggressive in rate hikes in the coming months. 
  • US recession fears grow. US GDP contracted 0.9% on an annualised basis in 2Q22, following a 1.6% decline in the previous quarter. The second consecutive quarter of economic decline met one of the common criteria for a technical recession. 
  • China disappoints on stimulus. China’s top leadership gave a downbeat assessment of economic growth and downplayed its GDP growth target of “around 5.5%” this year. There was also a lack of new stimulus policies announced at a key meeting of the Politburo earlier this week.  

ICYMI

Can’t catch up with all the earnings that came out last week? Here’s a quick recap. 

  • Amazon posted better-than-expected quarterly revenue and issued an upbeat outlook. Its ad revenue climbed 18% and cloud segment jumped 33% from a year ago. 
  • Meta reported its first ever quarterly sales decline. Revenue in 2Q22 fell 1% from the previous year, and the company issued a disappointing third-quarter forecast pointing to a consecutive decline in sales. 
  • Apple reported quarterly profit and revenue that exceeded Wall Street forecasts as iPhone sales continue to grow.
  • Alphabet’s quarterly sales was impacted partly by a pullback in spending by advertisers, but was not as bad as feared. 
  • Intel reported quarterly profit and revenue that missed earnings expectations, as supply chain issues and delays in the rollout of new data center chips weighed on results.
  • Singapore Airlines reported its second highest quarterly operating profit with soaring air travel demand. 
  • UOB Q2 net profit rose 11% to S$1.1b, as higher interest rates led to an improvement in margin. UOB declared an interim dividend of S$0.60. 
  • Keppel DC REIT's 1H22 distributions per unit (DPU) of 5.049 cents met market expectations, with no surprises from higher electricity prices this time. Read more here.
  • Digital Core REIT's 1H22 distribution per unit (DPU) of US$0.0206 was below its IPO projections due to higher interest cost. Read more here.
  • iFast reported a loss of S$2.7 million in 2Q22, partly driven by a S$5.2 million impairment taken for its India business after it decided to scale back its presence in the market. Read more here.

Source: Bloomberg, CNBC, Business Times, Edge Singapore

THE BIG IMPORTANT STORY

Why we’d avoid Keppel DC REIT after its 2Q22 results

While there were no nasty surprises this time, Keppel DC REIT will have to show that it can make more acquisitions and drive higher growth in distributions.

kdc2.jpg
Source: Keppel DC REIT

WHAT’S UP THIS WEEK

Sunday, 31 Jul

  • China PMI data

Monday, 1 Aug

  • Singapore: Raffles Medical Group earnings
  • US: Pinterest earnings

Tuesday, 2 Aug 

  • Singapore: AREIT earnings
  • US: Uber, Starbucks, AirBNB earnings

Wednesday, 3 Aug

  • Singapore: OCBC earnings
  • US: Under Armour, Robinhood, Lucid earnings

Thursday, 4 Aug

  • Singapore: DBS, Wilmar earnings
  • US: Alibaba, Twilio, Cloudflare earnings

Friday, 5 Aug

  • Singapore: Sembcorp Industries, Venture earnings
  • US Nonfarm Payrolls

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

Source: SGX, Bloomberg, Refinitiv

THAT’S INTERESTING

  • Rolex getting cheaper. The collapse in cryptocurrencies is easing supply of the most sought after watches on the second-hand market, depressing prices for hard-to-get Patek Philippe and Rolex watches, according to online-watch trading platform Chrono24. The price of a Patek Philippe Nautilus 5711A, which sells for US$35,000 at retail, surged to US$240,000 in the first quarter and is now fetching about US$190,000. (Source: Bloomberg)
Rolex
Image source: Rolex

Read also

Gain financial insights in minutes

Subscribe to our free weekly newsletter for more insights to grow your wealth

chatbubble Comments

0 comments