To The Moon

Last Week's Recap

1. CPI at 3-Year High, Small-Cap Records, AI Hardware Boom, and the 'New Fed' Debut

• Jagged path — S&P 500, NASDAQ, and Dow each +0.7% after a Wed sell-off and Thu-Fri rebound; still below early June records.

• Elevated inflation — May CPI at 4.2% (highest in 3+ years); May PPI surged to 6.5%, highest since November 2022.

• Small-cap record — Russell 2000 hit a record high, up ~4% for the week and 19% YTD.

• European rate hike — ECB hiked 25bp for the first time since 2023, lifted inflation forecast, downgraded growth outlook.

• Oil's bumpy ride — Crude jumped above $93 Wed then fell to ~$84 Fri (lowest since mid-April), down ~6% for the week.

• Volatility push-pull — VIX spiked to highest since April 7 on Wed, but closed Fri nearly 18% below prior week.

• Sentiment uptick — Michigan sentiment rose to 48.9 in June (from 44.8 in May), snapping three straight monthly declines.

• Fed chair's debut — Warsh's first FOMC meeting concludes Wed; rates expected steady, but press conference may signal year-end hike odds.

2. U.S. Market — S&P 500 edges up 0.66% as semiconductor equipment soars while Big Tech stumbles

The $S&P 500(.SPX)$ gained 0.66% to a fresh record 7,431.46, masking a sharp rotation from AI software to hardware beneath the surface.

Sectors: Housewares & Specialties (+30.25%), OLED Concept (+24.75%), Data Processing (+17.86%), Drug Retail (+16.31%), and Tires & Rubber (+12.08%) led.

10 Popular Stocks:

• $KLA-Tencor(KLAC)$ +31.94% — Process control leader surged on advanced node inspection demand; monopoly-like position in AI chip buildout.

• $Applied Materials(AMAT)$ +25.22% — Q2 revenue $7.91B (+11.4% YoY); guided 20%+ semi equipment growth in 2026. CEO cited HBM and advanced packaging demand.

• $Intel(INTC)$ +25.61% — Extended Q1 momentum; revenue $13.6B (+7% YoY), EPS $0.29 vs breakeven consensus. Data Center/AI +22% YoY to $5.1B.

• $Lam Research(LRCX)$ +20.95% — Wafer fab equipment maker rallied on AI-driven etch/deposition demand.

• $Micron Technology(MU)$ +13.6% — Extended 2026 surge; HBM demand continues to outstrip supply with no new supply until late 2027.

• $Oracle(ORCL)$ -13.83% — Plunged despite Q4 beat ($2.11 EPS vs $1.89 est); investors disappointed by AI spending trajectory and margin guidance.

• $Apple(AAPL)$ -5.27% — WWDC "Siri AI" reveal (powered by Google Gemini) disappointed; fell to $292.40. "Sell the news" after 50%+ YTD run.

• $Microsoft(MSFT)$ -6.22% — AI monetization concerns and margin compression fears weighed; short interest rose 14.7% M/M.

• $Amazon.com(AMZN)$ -3.04% — Edged lower with tech complex; 57 of 60 analysts maintain Buy.

• $Meta Platforms, Inc.(META)$ -4.49% — Declined on skepticism around AI agents monetization timeline.

Outlook: Decisive rotation from AI "application layer" (software) to "infrastructure layer" (semi equipment). Record SPX close masked sharp divergence. Watch Nvidia earnings and Oracle AI revenue guidance ahead.

3. Hong Kong Market — HSI slips 0.98% as tech profit-taking meets bank rotation

$HSI(HSI)$: Shed 0.98% to 24,718.10; tech giants sold off while state-owned banks rallied sharply.

$HSTECH(HSTECH)$: Fell 3.75% to 4,705.20, underperforming HSI by ~3pp — decisive rotation out of high-beta tech.

Sectors: Diversified Financial Services (+15.96%), Mortgage Finance (+11.78%), Electronic Components (+11.39%), and Food Retail (+10.86%) led.

9 Popular Stocks:

• $CHINA LIFE(02628)$ +7.57% — Led financial rally; deeply discounted ~5x P/E, 2.5% yield, prime beneficiary of tech-to-value rotation.

• $ICBC(01398)$ +5.71% — World's largest bank attracted rotation flows; ~6% dividend yield and defensive appeal.

• $BANK OF CHINA(03988)$ +4.14% / ABC (01288) +3.95% / CCB (00939) +2.98% — "Big Four" SOE banks collectively surged on Southbound buying and policy-backed stability.

• $TENCENT(00700)$ +2.29% — Bucked tech downturn; 1.09M share buyback (HK$500M) and strong Southbound inflows (HK$1.12B net buying). Target HK$700.

• $CNOOC(00883)$ -4.04% — Fell to one-month low HK$25.88, below 100-day SMA; oil retreat and net selling HK$164M.

• $CATL(03750)$ -5.41% — Profit-taking after June 2 surge to HK$777; lithium supply concerns weighed. JPM Overweight, target HK$725.

• $BABA-W(09988)$ -9.17% — Largest Southbound outflow victim (HK$2.18B net selling); government data-center competition fears. Citi maintains Buy.

Outlook: Classic risk-off rotation — banks up 3-7%, tech down 5-9%. Southbound flows were the key driver. With FIFA World Cup and summer holidays approaching, liquidity may thin; banking sector defensive appeal continues.

4. Singapore Market — STI dips 0.48% as gold and China tech SDRs retreat

The $Straits Times Index(STI.SI)$ shed 0.48% to 5,025.80, pulling back from June's all-time high of 5,150.69 as profit-taking in gold ETFs and Chinese tech SDRs offset strength in financials and industrials. The index remains up 28.49% YoY, underpinned by Singapore's safe-haven flows and AI-driven export growth.

Sectors: Heavy Electrical Equipment (+12.26%) and Health Care Equipment (+8.33%) led, while Gas Utilities (+5.40%) and Electronic Components (+5.00%) also advanced.

10 Popular Stocks:

• $BBCA ID SDR 1to2(IBKD.SI)$ +12.82% — Surged on digital advisory momentum and HK wealth connect inflows.

• $Alibaba HK SDR 5to1(HBBD.SI)$ -9.14% — Profit-taking and US-China tech overhang dragged the SDR lower.

• $Xiaomi HK SDR 2to1(HXXD.SI)$ -7.36% — Tracked broader Chinese tech weakness despite SU7 delivery traction.

• $GLD SG$(GSD.SI)$ -5.44% / O87 -5.55% — Gold ETF duo retreated as safe-haven demand eased amid tentative US-Iran de-escalation.

• $Delta TH SDR 1to1(TDED.SI)$ +5.01% — AI data-center power demand continued to lift the Thailand-based SDR.

• $SGX(S68.SI)$ +3.86% — Hit a new 52-week high on 16.2% YoY equities-cash revenue growth; up 59% over the past year.

• $Bank of CN HK SDR 1to1(HBND.SI)$ +3.43% — Edged higher on tentative Hong Kong office leasing recovery.

• $Wilmar Intl(F34.SI)$ +4.08% — Resilient palm oil prices supported Asia's leading agribusiness group.

Outlook: DBS Research maintains a year-end STI target of 5,250, though June may see FIFA World Cup and school-holiday softness before a seasonal July rebound.

5. Australian Market — ASX 200 surges 2.7% as biotech and staples lead, miners and gold retreat

The $S&P/ASX 200(XJO.AU)$ jumped 2.7% to 8,804, driven by defensive rotation into healthcare and consumer staples, offsetting weakness in resources and gold miners.

Sectors: Commercial Printing (+86.36%), Insurance Brokers (+21.31%), Oil & Gas Drilling (+18.18%), and Biotechnology (+14.02%) led.

10 Popular Stocks:

• $CSL LIMITED(CSL.AU)$ +16.11% — Biotech giant surged on defensive rotation; plasma therapies, vaccines, and iron deficiency segments offer resilient demand. Consensus Buy, target ~A$237.

• $WESFARMERS LTD(WES.AU)$ +10% — Diversified retail conglomerate bounced on value buying; Bunnings/Kmart resilience attracted buyers after ~10% YTD decline.

• $COLES GROUP LTD(COL.AU)$ +10.14% — Supermarket pure-play surged with staples rotation; ~3.4% fully franked yield, FY2026 EPS +6.8% expected.

• $WOOLWORTHS GROUP LTD(WOW.AU)$ +8.71% — Market leader advanced on defensive profile; ~2.7% franked dividend, YTD gains near 20%.

• $QBE INSURANCE GROUP LTD(QBE.AU)$ +7.41% — Global insurer rallied on premium-rate stabilization; 12M target A$22.30 (~13% upside), FY2026 yield 4.7%.

• $ARISTOCRAT LEISURE LTD(ALL.AU)$ +5.66% — Gaming machine maker advanced on US market dominance; Lightning/Dragon Link titles drive cash generation, ~28% upside to A$73.45.

• $TELSTRA GROUP LTD(TLS.AU)$ +4.63% — Defensive telecom edged up; FY2026 20c fully franked dividend (~4.1% yield) attracted income investors.

• $Resmed DRC(RMD.AU)$ +4.6% — Sleep-apnea device maker rose on structural demand; aging populations and obesity trends underpin growth.

• $NEWMONT CORP-CDI(NEM.AU)$ -8.46% — World's largest gold miner slumped as gold prices pulled back; profit-taking hit after 70% surge, despite record Q1 FCF $3.1B and $6B buyback.

• $COMMONWEALTH BANK OF AUSTRALIA(CBA.AU)$ -2.58% — ASX's largest bank retreated on slowing credit growth; viewed as fully valued with several Sell ratings.

Outlook: Classic defensive rotation dominated — healthcare/staples up, resources/gold down. Watch iron ore dynamics and CSL's August results for healthcare recovery confirmation.

The Week Ahead

1. Macro Factors: Key Themes to Watch

1. Central Bank Trifecta — BOJ, RBA, and the Fed all meet within 48 hours. Watch for any coordinated messaging or divergence on rate paths.

2. Fed Under Warsh — First rate decision with Kevin Warsh as Chair. Market focus on the press briefing for clues on the "new Fed" communication style.

3. Consumer Pulse — May retail sales expected at +0.5%. A miss could signal tariff fatigue hitting household spending.

4. Geopolitical De-risking — US-Iran deal signing on Friday could boost energy/transport sectors, though markets are closed that day.

5. Shortened Week — Juneteenth closure means any Thursday positioning could be volatile given the Iran deal timing.