LB Morning Call | Another Fed interest rate hike likely this month

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Asia Pacific

This morning, the U.S. stock futures index opened slightly higher, and the three major index futures rose by about 0.1%.

Overnight, the three major U.S. stock indexes closed down across the board, with the Dow down 0.52% to 31,173.84 points, the S & P 500 index down 1.15% to 3854.43 points, and the Nasdaq index down 2.26% to 11,372.6 points. The market expects U.S. inflation to remain high in June, which provides the basis for the Federal Reserve to raise interest rates sharply in July.

Nike, Disney and Caterpillar fell more than 2%, leading the Dow down. Big tech stocks fell across the board, with Apple down 1.48%, Amazon down 3.28%, Netflix down 5.15%, Google down 3.08%, Facebook down 4.68% and Microsoft down 1.18%. Tesla fell more than 6%. Twitter fell more than 11% as Musk would end his acquisition plan.

Anti-epidemic stocks fell across the board, Moderna fell 0.55%, Gilead Science fell 0.29%, Novavax Pharmaceuticals fell 11.78%, BioNTech fell 2.15%, and Pfizer fell 0.49%.

Most of the popular Chinese stocks fell, with Good Future down 12.37%, Kingsoft Cloud down 11.68%, Weibo down 10.16%, Pinduoduo down 10.03%, Bilibili down 9.97%, Alibaba down 9.32%, Baidu down 5.69%, JD.com down 3.9%. OneConnect rose 5.29%.

New energy vehicle stocks fell across the board, NIO fell 8.98%, Xiaopeng Motors fell 8.9%, and Li Auto Inc. fell 4.04%.

IPO

Haidilao announced that it will consider splitting the overseas business by physical distribution and listing it separately on the main board of the Hong Kong Stock Exchange by way of introduction.

Bei Sen Holdings Limited disclosed its prospectus on the Hong Kong Stock Exchange and plans to list on the main board market. Morgan Stanley and CICC are joint sponsors. The company is the largest provider of cloud-based human capital management (HCM) solutions in China. Investors include Matrix Partners Space Trek L.P., Shen Nanpeng's SCC VII and SoftBank's SVF II Bandicoot (DE) LLC.

New Shares Listed

Zhongkang Holdings and Read Boy is going to public today.

Tianqi Lithium's IPO was priced at HK $82.00 and received a substantial over-subscription of about 9.30 times, with 200 shares per lot. The shares are expected to be traded on the main board of the Hong Kong Stock Exchange on July 13. It will be traded in the gray market today.

The offer price of Noah Holdings-S has been set at HK $292.00 for a lot of 20 shares. The shares are expected to be traded on the main board of the Hong Kong Stock Exchange on July 13. It will be traded in the gray market today.

Huzhou Gas offered at HK $6.08, which is approximately 8.08 times moderately over-subscription. The shares are expected to be traded on the main board of the Hong Kong Stock Exchange on July 13. It will be traded in the gray market today.

The offer price of Mingchuang Premium Products is set at HK $13.80 for 200 shares per lot. The shares are expected to be traded on the main board of the Hong Kong Stock Exchange on July 13. It will be traded in the gray market today.

US Stock News

1. Electric car maker Rivian plans to cut hundreds of jobs, possibly around 5% of its workforce, sources said. The cuts will focus on non-manufacturing jobs. The cuts are still in the planning stage and the company has yet to make any decisions.

2. ARK Investment Management opened a long position in the second quarter and cleared 7 stocks such as SomaLogic; increased its holdings of 96 stocks such as Nvidia, Zoom, 908 Devices, and Xiaopeng Motors; reduced its holdings of 218 stocks such as Tesla and Shopify. Heavy stocks include Zoom, Tesla, Ruko, UiPath, and Teladoc.

3. Rosenblatt Securities analyst Crockett said that if Musk's $44 billion deal to buy Twitter fails, the latter's stock price could plummet by 68% to $11.

Hong Kong News

1. In the first half of 2022, the amount of equity financing in the primary market of Hong Kong stocks will be HK $114 billion, a decrease of 76.60% year over year. Only 26 companies successfully IPO in the first half of the year, a decrease of 43.48% year over year; the amount of IPO raised is only HK $19.7 billion, a decrease of 90.79% year over year. Only 11 IPO projects raised more than US $100 million (about HK $784 million), less than half of the same period last year.

2. Goldwind was reduced by JPMorgan Chase on July 5 to 1.4433 million H shares at an average price of HK $14.6355 per share, involving about HK $21.1238 million. After the reduction, JPMorgan's latest long position was 60.7733 million shares, and the proportion of long positions was reduced from 8.04% to 7.85%.

Singapore News

The 10-year average interest rate on Singapore savings bonds has started to climb higher this year. After the US Federal Reserve raised interest rates, the rate reached 2.71% in July. From its launch in 2015 to the beginning of this month, more than 146,000 investors have subscribed for nearly $6.8 billion, about 20% more than at the end of 2020, the Monetary Authority said.

Macroeconomy

1. the Fed Bostic said that he reiterated his support for another 75 basis point rate hike. The primary goal is to get interest rates to a more neutral position. The neutral rate is expected to be around 3%.

2. China's new RMB loans and social financing increased in June to record highs in the same period. At the end of June, M2 increased by 11.4% year over year, hitting a new high this year and maintaining double-digit growth for three consecutive months.

IDC reported that the global traditional PC sales in the second quarter fell by 15.3% year over year to a total of 71.3 million units, the second consecutive quarter of sales in decline. The top five global PC market shares in the second quarter were: Lenovo (24.6%), HP (18.9%), Dell (18.5%), Acer (6.9%), and Apple (6.7%).

Reminders

17:00, Eurozone July ZEW Economic Sentiment Index

18:00, June NFIB Small Business Confidence Index

US Treasury Secretary Janet Yellen is going to Tokyo on the eve of the G20 meeting of finance ministers and central bank governors until July 13.