CSOP USD Money Market Fund – 20240830

• Last week, data released were mixed.

• Conference Board Consumer Index exceeded expectations, reaching 103.3 in August (vs consensus 100.7).

• While labor market conditions worsened as July’s labor market differential revised down to 17.1% and further declining to 16.4% in August, jobless claims remained steady, indicating no sudden worsening in job market conditions.

• Additionally, US real GDP growth for the second quarter was adjusted upwards by 0.2 percentage points to 3%, due to a significant revision in real PCE to 2.9% from 2.3%, influenced by both goods and services expenditure.

• Looking forward, markets predict core PCE deflator for July will increase 0.2% m/m, which will boost Fed’s confidence that inflation is falling.

• Additionally, markets are also anticipating a 0.3% m/m increase in real consumer spending in July (vs 0.2% prior). Recent consumption is supported by dis-saving, and saving rate is anticipated to decline further in July.

• According to Bloomberg, it is noted that ~80% of households have used up excess savings accumulated during the Covid pandemic, meaning that there is a chance that households lack resilience to deal with negative shocks and consumption could slow if unemployment climbs as it has the past 4 months and if stock market rally loses momentum.

• We expect CSOPUMM to continue to deliver stable yield in the near term. As of 20240830, the fund has gross yield of 5.47% and net yield at 5.17%. ^

Source: CSOP, BEA, Bloomberg, as of 20240830. ^ Gross yield is based on annualized yield of underlying holdings. 7-day net yield is calculated based on calendar days and NAVs in 5-decimal.

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