Instead of the usual updates on products and companies, I’ll be adding what I’ve found interesting in the markets for the last week in one place, and some of my thoughts on what this means for the future.
Macro
Two rate hikes are expected by 2023. Bracing for impacts to high-debt companies. The first will be in 2023. A long way more? Perhaps. But:
Thinking of purchasing property? Consider the rate hike, and possibly more to follow. Hmm….
Banks, likely to be a boon for slightly increased spreads
Inflation, unsure if this action needs to be done now, or in 2023. Fed seems to be overall not too concerned about the 5% inflation (in the US at least)
Hedge Funds are going into the PE space. More competitive environment to chase returns. [More money chasing fewer opportunities, or perhaps causing more ventures to be started due to influx of more funding. SPACs as an easier way to exit companies makes sense that other fund types would want to go into this space as compared to playing the public markets (i.e. overvalued)]
Countries
US
Residential starts in the US increased >50% compared to a year ago (May 2021 vs 2020). Wood manufacturers are squeezing small suppliers, leading to consolidation of the market, and reinforcing the influence of larger players setting the prices and thus rules of the game.
Pulling back US antimissile systems in the Middle East, namely Iraq, Kuwait, Jordan, Saudi Arabia.
Record droughts in Midwest. 88% of the West is currently experiencing a drought. Lake Mead, US’ largest reservoir, is at its lowest level since 1930, where even hydroelectric plants have to be switched off for the first time. Firefighting teams cannot rely on lakes to resupply their water. Expect a worst fire fighting season this year.
China
Lost Pacific undersea cable project, as it is related to the former Huawei Marine Networks, and thus security concerns.
Japan
Aims to issue vaccine passports by End July. Pretty aggressive.
Also, vaccination numbers are ramping up. Japan’s serious.
COVID funding extended through to March 2022.
Core consumer prices have increased by 0.1%, largely due to energy prices. Economy shrunk at annualized 3.9% in first quarter.
Is primed to increase local chip supply. Likely giving some form of boosts to the industry, such as wage support, and also capacity expansion. Murata, I’m looking at you.
SK
Kakao’s Taxi arm is officially registered as a transport operator. Would other countries follow suit? This has significant impacts also wages, regulations come into play, affecting once profitable platform-only models such as Grab, GoJek, Lyft.
Singapore
Relaxes their lockdown, allowing citizens to dine-in, but with a max of 2 instead of 5 people.
VN/TH/ID
Ho Chi Minh goes into lockdown again, while tourist destinations such as Ha Long and Da Nang reopen.
Pegatron (assembler for Apple, Microsoft, Sony) to expand Vietnam operations
AstraZeneca vaccines from Japan arrived on Wednesday. 100M doses, though there are side effects that Japan has actually noted.
E-commerce competition becomes more heated. Amazon, Lazada, Alibaba, Shopee, and local players slug it out.
Brazil
Worst drought in a century comes as COVID also hits its high.
Companies
Apple
A recent teardown of Apple’s iPad Pro had 20% of the components (in terms of value) made from Taiwanese suppliers. Suppliers make key parts of what Apple calls the Liquid Retina XDR display and the core ship.
South Korea’s usage has decreased, as well as Japan (image sensor), and Europe (power management IC)
Amazon
Lowers app store fees to 20%, following Google and Apple.
Alibaba / Ant
Had a billion data points scraped/stolen. Hmmm.
Ant plans to list by year-end, but expect a 60% drop in their value compared to last.
Baidu
Has unveiled their robotaxi, co-developed with BAIC. This will be deployed in 3 years’ time to Beijing, Shanghai, Guangzhou, and Chongqing.
Bytedance
Revenues doubled to 34.3 Bn. This is no longer a start-up, I repeat, this is no longer a start-up.
Citibank
Selling off SME banking unit. Perhaps an early move to exit a soon-to-be competitive market for retail too.
Spotify
Spotify launched its Clubhouse rival, Spotify Greenroom.
Facebook said it will begin testing ads in its Oculus virtual reality headsets.
Toshiba
Top officials resigned due to collusion with industry ministry, undermining foreign shareholders
Tesla
Germany wants Tesla superchargers to support other cars too.
Transferwise
Planning a direct listing on the LSE.
Renesas
Restores full-chip capacity. Japanese carmakers can soon ramp up automotive production.
SpaceX
The first mission for national defense using a re-used rocket booster
Commods
Some have erased 2021 gains entirely. Soybeans, corn, wheat - seems mostly agriculture side. Lumber has fallen as well, by 42% from their highs in May.