The US economy grew at 2.6% in the second quarter, driven by consumer spending (+2.8%) as the jobs market showed solid growth in recent months. 

The result was largely in line with the street’s forecast, showing reasonable growth in the world’s largest economy. The stock market had mixed reactions to the GDP data, with the technology sector proving a pulling factor over the last two trading sessions. 


China’s PMI figure came out this morning, showing continuous expansion in the manufacturing sector. The official manufacturing figure came out at 51.4, below the market expectation of 51.6 for July. The official service PMI has also dropped to 54.5 from 54.9 in the previous month. This could be a reflection of the government’s ongoing deleveraging campaign, which curbs investment and demand locally.

Asian markets suffered a heavy sell-off last Friday following a weak trading session in the US overnight, after Twitter and Amazon announced worse-than-expected earnings. The Hang Seng index retraced 130 points – or 0.48% – and closed around the 27,000 mark. Today, investors will eye HSBC’s earning report, and the market expects it to announce a US$2bn stock buyback plan. 


Singapore’s Straits Times Index lost 24 points or 0.72% to fall to 3,330 points, mainly due to weakness in the banking and offshore sectors. DBS, OCBC and UOB bank lost 2.3%, 1.2% and 2.1% respectively, coming off from their two-year highs. 

This came in spite of UOB bank announcing a 5.5% increase in its second-quarter earnings, in line with the market’s expectations. This could be the result of profit-taking activities in response to unfavourable sentiment from the US market overnight. 

Sembcorp Marine’s latest earnings report painted a challenging picture of Singapore’s offshore and marine sectors. The company’s revenue was down 27.8% YoY, with profits having plunged 56% YoY. Earnings per share (EPS) was halved to 0.27 cent, translating into TTM P/E ratio of 61 times.  The outlook of the offshore and marine sector remains challenging amid a backdrop of muted oil prices. Sembcorp Marine’s share price traded 2.6% lower at S$1.69. 

In the week ahead, Singapore blue chips due to announce quarterly earnings include StarHub, Capitaland, Hongkong Land, Genting, Sembcorp Industries, DBS, Yangzijiang, UOL and Jardine Matheson. 

Technical analysis:

Hong Kong 50 - Cash

  • SuperTrend (10,3) sloped upwards along with the 10-Day simple moving average
  • Immediate support and resistance level could be found at 26,830 and 27,225 respectively
  • Momentum indicator MACD continued to trend up, suggesting that the uptrend is intact. 

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