Trading Tuesday

Market Data

Local

Global

*Data as of 4pm WAT

Market News

Local

Global

Weekly Investment Watchlist

Market Commentary:

Asia and Australia:

• Asian equities exhibited mixed performance on Tuesday. The Australian ASX reversed an initially weak opening to post gains for the second consecutive day, while Japan’s primary indices were set to close higher. The Hang Seng also rebounded after a poor start, while mainland China stocks remained flat.

• Country Garden, a Chinese property developer, has been granted additional debt repayment extensions for six out of eight onshore bonds, each extended by three years. The notional value of these bonds amounts to a total of CNY 10.8 billion ($1.48 billion).

• The People’s Bank of China (PBOC) is expected to cut the Required Reserve Ratio (RRR) for the second time this year. This move comes after August credit data exceeded expectations, signaling signs of stability in the Chinese economy.

• The recent 5-year Japanese Government Bond (JGB) auction showed relatively good demand, providing support for JGBs. The Ministry of Finance sold ¥2.5 trillion ($17 billion) of debt maturing in June 2028. Following Governor Ueda’s recent comments, the market appears to be more confident about the possibility of higher interest rates.

• Australian consumer confidence continued to decline in September, despite the Reserve Bank of Australia (RBA) keeping the cash rate unchanged for a third consecutive month.

• IPO underwriters for Arm are closing orders a day earlier than originally planned. The IPO is expected to be priced on Wednesday, likely at or above the initial range of $47 to $51 per share. Reports suggest that the offering has been oversubscribed by as much as 10 times, possibly reaching 15 times by Wednesday.

• Alibaba’s CEO has stated that artificial intelligence (AI) is now a key priority in the group’s revamp plan, emphasizing the growing importance of AI in the company’s strategy.

Europe, Middle East, Africa:

• European equity markets exhibited mixed results. The FTSE 100 outperformed other indices. Sectors such as retail, telecom, and insurance showed strength, while chemicals, technology, and real estate lagged.

• In the UK, although unemployment increased, wage growth accelerated due to bonuses. Total average earnings, including bonuses, reached 8.5%, exceeding the consensus forecast of 8.2%. This has raised concerns for the Bank of England (BoE) as persistent wage growth contributes to inflation.

• UK grocery inflation has decreased to its lowest level in a year as it entered September. Annual grocery inflation for the four weeks ending September 3rd was 12.2%, down from 12.7% in August.

• Germany’s ZEW investor sentiment unexpectedly improved in September to -11.4, compared to -12.3 in the previous period. However, the current conditions index continued to weaken, reaching its lowest level in three years at -79.4, down from -71.3.

• Eurozone ZEW investor sentiment came in worse than expected at -8.9, down from -5.5 in the previous month. The figure fell short of the expected level of -6.2.

The Americas:

• Oracle reported fiscal Q1 revenue largely in line with expectations, but profitability and free cash flow (FCF) surpassed estimates. However, fiscal Q2 guidance for 5-7% revenue growth lagged behind the consensus of +8%, and EPS only met the higher end of the outlook range. The stock price dropped by nearly -10%, reflecting market sentiment.

• Apple launched its new iPhone 15 models today, along with the Apple Watch Series 9. The company expects to introduce the first phones manufactured at its plant in India. Initial previews seemed positive regarding hardware upgrades, although there is debate about whether these upgrades are sufficient to drive sales at a time when consumer spending is slowing.

• In negotiations with the Big Three US automakers (General Motors, Ford, and Stellantis), the United Auto Workers (UAW) has reduced its pay-increase demand. Recent proposals include a mid-30% wage increase, down from the initial demand of 40%+.

• Bank of America’s latest Global Fund Manager Survey indicates that investor sentiment is no longer extremely bearish, with global equity allocations at a 17-month high.

• The NFIB Small Business Optimism Index slipped to 91.3 in August from 91.9 in July, marking the 20th consecutive month below the 49-year average of 98.

• Tesla received an upgrade from “equal-weight” to “overweight” at Morgan Stanley, with the move attributed to the opportunity presented by Tesla’s Dojo supercomputer initiative.

The Week Ahead:

• Monday:

• Tuesday:

• Wednesday:

  • Manufacturing Production (YoY) (GB)

  • Industrial Production (MoM) (EA)

  • Consumer Price Index (MoM) (US)

• Thursday:

  • Employment Change s.a (AU)

  • Retail Sales (MoM) (US)

• Friday:

  • Industrial Production (YoY) (CN)

  • NY Empire State Manufacturing Index (US)

  • Industrial Production (MoM) (US)

  • Michigan Consumer Sentiment Index (US)

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Disclaimer: The information contained in this report is intended for informational purposes only and should not be considered as investment advice. The information is obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed.