Markets Focus

The Dow and S&P 500 continued their fourth straight session of declines. Large tech stocks had declined and weighed on the sentiments of the S&P 500. The Healthcare sector also saw pressure, especially after President Biden administration announced a plan to reduce drug prices.

The initial jobless claims beat forecasts, and it is a breather for market participants after investors were concern about labour market health after a disappointing August job data. Nonetheless, the better result could be employers retaining their current employees rather than adding more jobs.

Pika World will be monitoring the labour market pulse as it could affect the broader market sentiments.

Chinese Stocks under Pressure Again

Yet another move by the Chinese government is putting Chinese stocks under pressure. The new rules on the gaming sector are hurting stocks like Tencent and NetEase. These companies were summoned and are tasked to help with the prevention of online gaming addiction among children.

We have seen how regulators issued new guidelines to limit playing time for those under 18s to 3 hours a week. Now, regulators are also putting a brake on the approval of new online games. Likewise, the Transport Ministry is also focusing on the crackdown on the ride-hailing industry.

Tough Aura for Chinese Stocks

It is a brutal reminder of how unpredictable and swift Chinese regulators can affect the social lives of citizens and, in turn, affect the way companies operate. NetEase fell by about 11%, while Tencent slumped by 8.5%.

Pika World favours some exposure to Chinese counters given the strong economic prospects while balancing the regulatory risks in the background.

Ford Might Be an Underdog

While many Auto companies are grappling with semiconductor shortages, Ford might see some glow. We come to understand that Ford is hit hard as the company has missed about 200,000 units of production thus far this year, which is about 14% of its potential production ability.

However, in August, we have seen Ford’s dealer inventories rising. Low inventories signal problem and is attributed to chip storage. Yet, Ford production hit around 93% of its planned production for August, which is its highest level since July 2020. This might signal light at the end of the tunnel for Ford.

What’s on the Menu Today?

We have come to the most important day of the week.

At 8.30 pm, we will receive the PPI data, which we expect to moderate from 1% to 0.6% in Aug based on a m-o-m basis.

Recall that PPI is critical as Pika World views the indicator as a more “forward” indicator. Therefore, a high PPI reading may hint at pushing CPI higher, given that producers may pass on some input inflation to consumers to protect their margin resulting in higher prices, thus CPI.

It is 10 September, Friday at 7.30 am in Singapore and 7.30 pm in New York. It is the last trading day of the week, and we wish all Pika friends a HUAT ending to the week!