Daily Morning Note – 31 October 2018

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YOUR PHILLIP SUMMARY

U.S. Stocks Rebound

U.S. stocks ended a tumultuous day sharply higher, with all major averages rising at least 1.4 percent as volatility continues to grip equity markets during earnings season. Treasuries fell and the dollar rose. The S&P 500 Index twice erased gains that topped 1 percent before finally securing a rebound in the final hour of trading. All 11 main groups rose, with consumer and commodity shares pacing gains. The average flirted with a correction earlier Tuesday and is still down more than 8 percent in October, on track for its worst month of the bull market. Facebook edged higher in after-hours trading following its earnings report. Ahead in Asia, the Bank of Japan is expected to keep monetary policy unchanged, China releases official PMI figures for October, while Japan and South Korea report September industrial production. Australia also has third quarter CPI data, and Samsung reports earnings.

Can China Break Free of Big Stimulus?

China’s attempt to break free from the debt-financed stimulus of the past is being stress tested by Donald Trump. As the White House threatens tariffs on everything the U.S. imports from China, policy makers in Beijing are cushioning the economic blow with tax cuts, regulatory relief and investment incentives, rather than the kind of spending and monetary binge seen in 2008 and 2015. Separately, Singapore’s sovereign wealth fund boss named credit excesses and the property market as two of the biggest challenges facing China.



BREAKING NEWS

Facebook’s Revenue, Earnings Growth Slows

Facebook has been bracing for slower growth in its advertising business, which
currently collects the bulk of its revenue from ads that appear in the Facebook
news feed. Recording lower third-quarter revenue than expected, Facebook
warned that it is in the early stages of a transformation in its core businesses
that will lead to slower growth and higher costs in the short term.

GE Slashes Payout, Discloses Inquiry; Shares Plummet

GE has struggled over the past year with declining sales and profits. Shares fell
Tuesday after the conglomerate slashed its dividend to one cent after US$22bn
writedown and said federal regulators had opened a criminal probe of its accounting
practices, as GE seeks to restructure under new Chief Executive Larry
Culp.

Venture Corp Drops More than 4% on Tuesday

Electronics manufacturing services provider Venture Corporation’s counter sank
4.44 per cent on Tuesday, capping a torrid day of trading for the contract
manufacturing services provider.

IndoAgri Q3 profit plunges 91.3% to 8.74b rupiah on weak commodity prices

MaInboard-listed Indofood Agri Resources (IndoAgri) reported a 91.3 per cent
dive in its third fiscal quarter earnings to 8.74 billion rupiah (S$793,264), with
the agribusiness attributing the fall to poor performance in sales and profit in its
plantation division arising from weak commodity prices and increase in crude
palm oil (CPO) stock.

Singapore most active in PE, VC activity in region in Q2: EY report

Private equity (PE) and venture capital (VC) activity in South-east Asia during the
second quarter of 2018 remained robust, with about US$1.3 billion pumped into
36 deals.

Crypto Exchange Coninbase Valued at US$8bn

US cryptocurrency exchange Coinbase has raised fresh funds at a valuation of
more than $8bn, underscoring the interest that investors have in the sector
despite sharp declines in the price of many digital coins.

Home Prices Continue to Lose Momentum

Annual home-price gains fell below 6% for the first time in a year in August, another
sign that the slowdown in the housing market is becoming widespread
and is likely to persist in the months to come.


Source: SGX Masnet, Bloomberg, Reuters, The Business Times, Channel NewsAsia, Phillip Securities Research

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