Macro Matters

US

Biden Says He Is Confident America Will Not Default on Its Debts

President Biden, just moments before he departed on Wednesday for a diplomatic trip to Asia, said he was confident "America will not default" as congressional leaders in both parties offered some signs of optimism about eventually reaching a deal to raise the nation's borrowing limit.

Retail Sales Rebound in April, Pointing to Steady Economy.

Retail sales—a measure of spending at stores, online and in restaurants—rose a seasonally adjusted 0.4% last month from the month before, after declining in February and March, the Commerce Department said Tuesday.

Consumers spent more on autos and dining out last month, while boosting online purchases. They cut spending on gasoline and on big-ticket purchases such as appliances and furniture.

"Consumer spending is not about to contract and will instead support at least modest continued economic growth," said Andrew Hollenhorst, chief U.S. economist at Citi.

Nasdaq Records the Largest Outperformance to Dow Jones in Over 30 Years

Nasdaq Composite and the S&P 500 index logged their highest closes since August 2022, as investors digested economic data, robust corporate earnings, and reports suggesting progress in resolving the debt-ceiling debate in Congress. Nasdaq is outperforming the Dow Jones by 20.05% year-to-date, the largest outperformance in over 30 years.

SG

Non-oil domestic exports drop 9.8% YoY in April

A 20.9% drop in exports to China drove the overall decline.Non-oil domestic exports (NODX) declined further in April, falling 9.8% YoY.

Based on Enterprise Singapore's report, the decline in exports to several of Singapore’s top markets, including China, Taiwan, and Malaysia, drove the overall drop in NODX.

Exports to the three markets fell by 20.9%, 27.5%, and 35.0%, respectively.Enterprise Singapore also attributed the overall drop to decreases in electronic (-23.3% YoY) and non-electronic product exports (-5.8%% YoY).

Sector Highlights

US

Short Sellers Up Regional Bank Bets Even as Lender Concerns Ease

Bets against regional banks continue to pile on even as the sector recovers from the turmoil that shook financial markets in March.

Short interest as a percentage of shares outstanding in the SPDR S&P Regional Banking ETF (ticker KRE) rose to 92% from 74% a week ago, according to data compiled by S3 Partners, a technology and data-analytics firm. When accounting for the synthetic long bets created in each short sale, it means almost 48% of positions in the ETF are wagering on a decline, up from 42% last Wednesday. (Bloomberg)

13F Tracking: Major Investors Appeared to Take Advantage of Regional Bank Stocks Last Quarter.

Major investors from David Einhorn to "Big Short" Michael Burry appeared to load up on regional bank stocks during a turbulent first quarter, picking up shares in the sector for either a short-term trade or a conviction bet that the industry would weather the storm.

A Stock-Market Milestone: Apple Is Now Worth More Than the Entire Russell 2000.

Apple's premium over this group of small-cap stocks continued to widen over the past two weeks as the consumer-technology giant reported earnings that surpassed Wall Street analysts' expectations.

With a market capitalization of roughly $2.7 trillion, Apple is now worth roughly $100 billion more than the combined value of all 2,000 stocks in the Russell 2000, according to Bloomberg data shared with MarketWatch.

The only other time that occurred was Sept. 1, 2020, when Apple's valuation passed that of the small-cap index for only a day.

13F Tracking: Berkshire Hathaway Adds Apple Shares, Sells Entire Stake in TSMC

Berkshire Hathaway Inc on Monday disclosed it has begun investing in Capital One Financial Corp, added Apple Shares while shedding its holdings in Bank of New York Mellon Corp and US Bancorp, as well as Taiwanese chipmaker TSMC and furniture chain RH.

SG

The Trio of STI Banks Report Record Quarterly Net Profits

DBS, OCBC and UOB comprise 46% of the STI weightages and have averaged 32% total returns since the end of 2019, outpacing the STI’s 15% total return over the period.

The trio of STI banks reported record quarterly profit for 1QFY23, supported by Net Interest income (“NII”) growth.Combined total income of the trio increased 36% YoY on 49% combined NII growth.

More than two-thirds of the 1QFY23 combined total income was derived from NII. Combined 1QFY23 NII for the trio was S$8.0 billion, up from S$5.4 billion in 1QFY22, and down from S$8.2 billion in 4QFY22, impacted by a short quarter in 1QFY23 vs 4QFY22. The three banks had reported nine consecutive quarters of combined QoQ NII growth.

Top Corporate News

US

Tencent posts fastest jump in quarterly revenue in more than a year after China reopens.

Tencent reported an 11% jump in quarterly revenue Wednesday, marking its fastest growth in more than a year, as the company saw a big rebound in payment volumes, ad sales, and gaming.

Tencent’s online ad revenue increased by 17% in the first quarter to 21 billion yuan, driven by advertising on video accounts, “mini programs” within Tencent’s WeChat app, and mobile ads.

Alibaba misses revenue estimate, approves cloud unit spinoff.

Alibaba posted a 2% rise in quarterly revenue that missed expectations on Thursday and said it would list its cloud computing business in the next year.

The company has been struggling to attract new users as China's e-commerce sector matures and it grapples with inroads made by new competitors such as PDD and Douyin. Alibaba's China commerce segment revenue fell 3% year-on-year, but the online retail sales of physical goods increased 7.3% yoy in the first quarter.

Sea reports modest growth in Q1 revenue, gaming sees steep decline.

The company reported GAAP revenue of $3 billion in the Jan to March period, which grew modestly at 4.9% year-on-year. Its total gross profit was $1.4 billion. Digital Entertainment's revenue was US$539.7 million, 52.5% lower than 2022Q1. E-commerce business posted GAAP revenue of $2.1 billion, primarily driven by the improved monetisation and growth of its credit business.

SG

SIA Group posts highest net profit in its 76-year history. A strong final dividend is a key surprise.

On May 16th, SIA Group has announced its financial performance for FY2022/23, reporting the highest net profit in its 76-year history. The company's strong demand has led to record revenue, operating profit, and passenger load factor. Additionally, near term forward passenger sales are robust across all cabin classes, and cargo revenue remains above pre-Covid levels, despite softer demand.

Upcoming Economic Data

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