{"id":74026,"date":"2025-08-12T13:41:44","date_gmt":"2025-08-12T05:41:44","guid":{"rendered":"https:\/\/www.kgieworld.sg\/research\/?p=74026"},"modified":"2025-08-12T13:41:44","modified_gmt":"2025-08-12T05:41:44","slug":"weekly-securities-newsletter-market-shakes-quality-stays","status":"publish","type":"post","link":"https:\/\/www.kgieworld.sg\/research\/weekly-securities-newsletter-market-shakes-quality-stays\/","title":{"rendered":"Weekly Securities Newsletter: Market Shakes, Quality Stays!"},"content":{"rendered":"\n
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Market Shakes, Quality Stays!<\/strong><\/strong><\/p>\n\n\n\n

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Chart of the Week:
U.S. Job Market Freezes: Stocks Volatile, Bonds Rally<\/h2>\n\n\n\n

U.S. nonfarm payrolls rose by just 73,000 in July, missing the 100,000 estimate. June\u2019s figure was sharply revised down from 147,000 to 14,000, and May was cut from 125,000 to 19,000\u2014bringing total downward revisions over the past two months to 258,000. The rapid drop in moving averages signals a clear labor market deterioration. The ISM Manufacturing Index also fell from 49 to 48. President Trump, accusing the Bureau of Labor Statistics of fabricating a weak jobs narrative, abruptly fired its director. As economic momentum cooled, U.S. equities turned volatile at elevated levels.<\/p>\n\n\n\n

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Market Recap 1:
Semiconductor Tariff Ripples, Weak Economy Heighten Stagflation Risks<\/h2>\n\n\n\n

US labor market softness and a decline in the ISM Manufacturing Index, with Services PMI at 50.1 vs. 51.5 expected and 50.8 prior, signal a clear slowdown as new orders fall. Stagflation fears, fueled by tariffs, are rising. Trump announced a 100% tariff on semiconductors and steep duties on imported drugs, paired with US investment exemptions, and raised tariffs on Indian exports to 50%, adding uncertainty and keeping equities in choppy trade.<\/p>\n\n\n\n

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Market Recap 2:
UK Rate Cut, Fed May Ease in September; Gold Supported, Oil Tumbles<\/h2>\n\n\n\n

US initial jobless claims rose 7k, above forecasts, to a four-week high. Factory orders fell 4.8% MoM, fueling expectations for a September Fed rate cut. This week\u2019s $42B 10-year Treasury auction saw a bid-to-cover of 2.35x vs. 2.51x prior, indicating softer demand. Trump nominated CEA Chair Mullane to replace the resigned Fed governor, pushing the dollar index lower.<\/p>\n\n\n\n

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What\u2019s Trending:
US Tariff Revenue Tops $100B; Inflation Rebound Concerns Persist<\/h2>\n\n\n\n

On Apr 2, Trump announced reciprocal tariffs on 75 countries to rebalance what he views as an unfavorable global trade system, originally set to start Apr 9 but delayed for over a quarter. By Jul 31, some rates had been implemented, mostly below April\u2019s levels; however, Yale\u2019s Budget Lab noted that once the latest tariffs took effect on Aug 7, the average effective tariff on foreign goods rose from 2.5% at the start of the year to 18.4%, potentially adding $2,400 in annual costs per US household.<\/p>\n\n\n\n

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In Focus 1:
Economy Slows Down, Market Fluctuates; High-Quality Stocks Prove More Resilient<\/h2>\n\n\n\n

High-quality stocks focus on strong financial fundamentals\u2014superior ROE, earnings stability, low leverage, and healthy cash flow\u2014outperforming peers and spanning multiple sectors to avoid concentration risk. Historically, during periods of slowing or contracting growth, their robust balance sheets helped them better withstand high rates and economic downturns. With recent declines in US ISM manufacturing and services indices, these stocks are expected to outperform the broader market.<\/p>\n\n\n\n

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In Focus 2:
Diversify from Overconcentrated Tech; High-Quality Stocks Deliver Superior Long-Term Returns<\/h2>\n\n\n\n

Over the past two years, US equity market concentration has risen sharply, with capital heavily favoring select large-cap growth stocks. While this has benefited passive strategies tracking major indices, it has also amplified volatility during market corrections. Tech stocks, after sharp gains, now trade at P\/E levels well above the 10-year average. In contrast, high-quality stocks are reasonably valued, with global high-quality names enjoying a more pronounced valuation advantage over their US counterparts. Global high-quality stocks also have stronger forecast earnings growth than US and global indices\u2014second only to tech. For investors heavily concentrated in tech, adding high-quality stocks can sustain portfolio growth while tempering volatility.<\/p>\n\n\n\n

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China Sunsine Chemical Holdings is a leading specialty rubber chemicals producer selling accelerators, anti-oxidant, vulcanizing agent<\/p>\n","protected":false},"author":16,"featured_media":74027,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","_uag_custom_page_level_css":"","footnotes":""},"categories":[35],"tags":[],"class_list":["post-74026","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-global-markets-weekly-updates"],"aioseo_notices":[],"uagb_featured_image_src":{"full":["https:\/\/www.kgieworld.sg\/research\/wp-content\/uploads\/2025\/08\/Market-Shakes-Quality-Stays.jpg?wsr",626,470,false],"thumbnail":["https:\/\/www.kgieworld.sg\/research\/wp-content\/uploads\/2025\/08\/Market-Shakes-Quality-Stays-150x150.jpg?wsr",150,150,true],"medium":["https:\/\/www.kgieworld.sg\/research\/wp-content\/uploads\/2025\/08\/Market-Shakes-Quality-Stays-300x225.jpg?wsr",300,225,true],"medium_large":["https:\/\/www.kgieworld.sg\/research\/wp-content\/uploads\/2025\/08\/Market-Shakes-Quality-Stays.jpg?wsr",626,470,false],"large":["https:\/\/www.kgieworld.sg\/research\/wp-content\/uploads\/2025\/08\/Market-Shakes-Quality-Stays.jpg?wsr",626,470,false],"1536x1536":["https:\/\/www.kgieworld.sg\/research\/wp-content\/uploads\/2025\/08\/Market-Shakes-Quality-Stays.jpg?wsr",626,470,false],"2048x2048":["https:\/\/www.kgieworld.sg\/research\/wp-content\/uploads\/2025\/08\/Market-Shakes-Quality-Stays.jpg?wsr",626,470,false]},"uagb_author_info":{"display_name":"Jiong Han Lee","author_link":"https:\/\/www.kgieworld.sg\/research\/author\/jionghan-leekgi-com\/"},"uagb_comment_info":0,"uagb_excerpt":"China Sunsine Chemical Holdings is a leading specialty rubber chemicals producer selling accelerators, anti-oxidant, vulcanizing agent","_links":{"self":[{"href":"https:\/\/www.kgieworld.sg\/research\/wp-json\/wp\/v2\/posts\/74026","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.kgieworld.sg\/research\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kgieworld.sg\/research\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kgieworld.sg\/research\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kgieworld.sg\/research\/wp-json\/wp\/v2\/comments?post=74026"}],"version-history":[{"count":1,"href":"https:\/\/www.kgieworld.sg\/research\/wp-json\/wp\/v2\/posts\/74026\/revisions"}],"predecessor-version":[{"id":74028,"href":"https:\/\/www.kgieworld.sg\/research\/wp-json\/wp\/v2\/posts\/74026\/revisions\/74028"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.kgieworld.sg\/research\/wp-json\/wp\/v2\/media\/74027"}],"wp:attachment":[{"href":"https:\/\/www.kgieworld.sg\/research\/wp-json\/wp\/v2\/media?parent=74026"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kgieworld.sg\/research\/wp-json\/wp\/v2\/categories?post=74026"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kgieworld.sg\/research\/wp-json\/wp\/v2\/tags?post=74026"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}