Macro Matters

SG

Singapore's Domestic Wholesale Trade Sales Down 3.5% in Q4

Singapore's domestic wholesale trade sales fell 3.5% YoY in Q4 2023, with petroleum products dragging overall sales down by 25.7%. However, excluding petroleum, domestic wholesale sales jumped 16.2%, with metals, timber, and construction reporting the highest increase of 88.9%. General wholesale trade rose by 15.6%, while domestic wholesale trade in transport equipment fell by 31%. Foreign wholesale sales decreased 4.7% YoY in Q4 2023.

US

US existing home sales rise to five-month high in January

Existing-home sales expanded 3.1% in January to a seasonally adjusted annual rate of 4.00 million. Sales declined 1.7% from the prior year. The median existing-home sales price climbed 5.1% from January 2023 to $379,100 – the seventh consecutive month of year-over-year price gains.

The inventory of unsold existing homes increased 2.0% from one month ago to 1.01 million at the end of January, or the equivalent of 3.0 months' supply at the current monthly sales pace.

US weekly jobless claims fall as labor market remains tight

The number of Americans filing for unemployment benefits unexpectedly dropped by 12,000 to 201,000 for the week ended Feb. 17, indicating strong job growth in February. Economists had predicted 218,000 claims. The labor market is still viewed as tight, but recent job gains were concentrated in a few sectors, which poses downside risks to employment outlook. Worker productivity has also increased as the economy expands despite the Fed's aggressive monetary policy stance.

Fed Minutes Suggest Officials Are Seeking Smallest Balance Sheet Possible

Federal Reserve policymakers are focused on reducing the central bank's balance sheet, currently under discussion for a potential size reduction from its peak of nearly $9 trillion. Recent minutes from the Federal Open Market Committee meeting revealed considerations of slowing the pace of quantitative tightening (QT) to ensure ample bank reserves and extend the balance sheet reduction process. Since starting QT in June 2022, the balance sheet has already decreased by approximately $1.3 trillion, with discussions ongoing about achieving this reduction without disrupting financial markets or hindering broader policy objectives.

Smart Money Flow

SG

Manufacturing-Related Stocks in Singapore Record Net Institutional Inflows of $22M in 2024

Data from the Singapore Exchange shows that manufacturing-related stocks in Singapore received net institutional inflows of $22M in the first seven weeks of 2024. Stocks in the technology and healthcare sectors saw more net inflows compared to those in the consumer, energy, and material resources sectors. Venture Corp recorded the largest net inflow of $43M. The iEdge SG Advanced Manufacturing Index contributed about 18 cents to every dollar invested in the Singapore stock market.

US

Major US Stock Indexes Hit Records as Nvidia Rekindles AI Rally

all three major American stock indexes – the S&P 500, Nasdaq 100, and Dow Jones Industrial Average – hit new all-time highs, fueled by Nvidia Corp.'s exceptional earnings report and optimism about AI-driven profit growth. The S&P 500 achieved its 12th record close of 2024, up nearly 24% since late October, while the Nasdaq 100 surged 3% and the Dow surpassed 39,000 for the first time. This marked a continuation of simultaneous record-breaking performances by these indexes, a trend not seen since November 2021.

US Money-Market Funds See Second Straight Week of Outflows

U.S. money-market fund assets fell for the second consecutive week, with around $5.33 billion flowing out in the week ending Feb. 21, reducing total assets to about $6.009 trillion. The decline was due to expectations of sustained high short-term rates, reducing the need for companies to use money funds for downside protection. Government funds investing in Treasury bills and repurchase agreements declined by $8.92 billion, while prime funds focusing on higher-risk assets like commercial paper increased by $2.84 billion.

U.S. Equity Risk Premium Reaches Record Low Since Dot Com Bubble

U.S. equity risk premium has fallen to its lowest level since the aftermath of the Dot Com Bubble.

This is the premium that investors receive to compensate them for taking on additional risk in the stock market instead of treasuries.

Top Corporate News

SG

SIA Records 14.4% YoY Rise in Group Passenger Traffic for January 2024

Singapore Airlines reported a 14.4% YoY rise in group passenger traffic to 12.6 billion for January 2024, with revenue passenger-kilometres up 14.3% to 9.6 billion. Passenger capacity increased by 16.5% YoY, outpacing January's revenue passenger-km due to the shift in the Chinese New Year to February. However, the passenger load factor was 85.3%, down 1.6 percentage points YoY. SIA and Scoot carried a combined 3.2 million passengers in January 2024, up 23.1% YoY.

UOB Q4 Profit Rises 21.8% to S$1.4 Billion; Proposes S$0.85 Per Share Final Dividend

UOB's net profit for Q4 2023 rose 21.8% YoY to S$1.4 billion, due to higher net fee income and other non-interest income. However, it missed the Bloomberg survey's S$1.5 billion consensus forecast. Net fee income was up 17.3% to S$569 million, while other non-interest income climbed 53.7% to S$438 million. The board has recommended a final dividend of S$0.85 per share, bringing the full-year dividend to S$1.70 per share, representing a payout ratio of about 50%. For the full year, net profit was up 24.9% to a record high of S$5.7 billion, but missed Bloomberg's S$6 billion consensus forecast.

US

What positives/concerns NVIDIA's latest quarterly report reveals?

Goldman Sachs believes NVIDIA's latest quarterly report demonstrates the following positives and concerns.

Positives:

1. Significant presence in Inference(roughly 40%)

2. Broadening of Data Center demand profile

3. String of new products coming in Data Center

4. Software exceeds $1bn annualized run-rate

5. Supply to grow through the end of CY2024

6. Record gross margin

  7. Investing in the future

Concerns:

1. Sustainability of Data Center strength

2. Share loss in China Data Center

Microsoft Will Use Intel to Manufacture Home-Grown Processor

Intel Corp. has secured Microsoft Corp. as a client for its custom chip business, a significant step in Intel's turnaround under CEO Pat Gelsinger. Microsoft will use Intel's 18A technology for in-house designed chips, aligning with Intel's shift to compete in the foundry market against leaders like Taiwan Semiconductor Manufacturing Co. This collaboration supports Microsoft's goal of customizing chips for its data-center and AI operations.

Palo Alto Networks Plunges by Most Ever After Cutting Outlook

Palo Alto Networks Inc. experienced a significant decline after lowering its annual revenue forecast to $7.95 billion to $8 billion, below the anticipated $8.18 billion, sparking concerns about reduced customer spending in the cybersecurity sector. This revision comes as a setback for investors who had driven the stock up by nearly 120% in the past year, banking on the success of new AI-powered products and market-share expansion. The reduced forecast, indicating a growth rate of 16% compared to the previous 25%+ rate, has reignited industry-wide fears of spending cutbacks amid broader economic uncertainties, impacting cyber stocks significantly.

Rivian Tumbles Most Ever as Job Cuts Signal Stalled Momentum

Rivian Automotive Inc.'s shares plummeted to a record low following its announcement of a lower-than-expected production forecast of only 57,000 vehicles for the year, aligning with last year's numbers and falling significantly short of the anticipated 80,000 units. Additionally, the electric-vehicle manufacturer, known for its plug-in pickups, SUVs, and delivery vans, revealed plans for a 10% reduction in its salaried workforce, marking the third cut in the past 18 months.

Moon landing: US firm Intuitive Machines makes historic touchdown.

Intuitive Machines successfully landed its Odysseus robot on the lunar south pole, marking the US's return to the Moon's surface after 50 years. The company confirmed the landing and transmission of signals, which was celebrated by staff.

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