Last week, US’s Dow Jones Industrial Average (DJIA) crossed 27,000 for the first time reaching a record high of 27,359.16 on 15 July 2019. Unfortunately, the rally did not follow through and the US index slipped amidst less-than-lustrous corporate earnings and a lack of progress for the US-China trade deal. Over the last fortnight, DJIA inched up 1 percent higher closing at 27,222.97.
As the trade war dragged on, China released its 2Q19 figures indicating that its economic growth has slowed to 6.2 percent. This was lower than the 6.4 percent expansion registered in the first quarter this year and was the weakest rate in the last 27 years. Shanghai Composite Index dipped 2.9 percent last fortnight.
Likewise, Singapore’s gross domestic products grew by a meagre 0.1 percent in the second quarter this year, widely missing economists’ forecasts and marked the weakest growth in a decade since the last recession in mid-2009. Concurrently, non-oil domestic exports slumped further by 17.3 percent in June 2019, signaling the fourth consecutive month of decline and the biggest drop in the last six years.
Weighed by the weak fundamental data announced and uncertainties around the on-going trade disputes, Straits Times Index (STI) did not manage to break new highs as per our western counterparts. The local benchmark lingered below 3,400 as investors await more clarity from the upcoming FOMC meetings on 30 and 31 July. Last fortnight, STI gained 0.3 percent to finish at 3,377.96.