Notable market news this past week (23-Aug-26)
Here is the Skeptivest roundup of the latest market headlines for the week
🌍 US rates in focus, treasury buybacks offset by hawkish Fed
US Treasury buybacks were stepped up, with the Treasury announcing that it will at least double the maximum size of its liquidity-support purchases in the 10-20 years and 20-30 years sectors to US$4bn per operation from 9 September through the end of the current refunding quarter. This brings planned purchases during the August-October quarter to up to US$38bn of off-the-run securities for liquidity support, alongside a further US$25bn for cash management. The increase reflects strong investor demand for liquidity support in longer-dated off-the-run Treasuries and should provide a modest technical tailwind for the long end by improving liquidity and reducing market fragmentation. However, the impact on outright yields is likely to remain limited given the much larger scale of Treasury issuance. As a result, treasury yields moved higher last week, with the sell-off concentrated at the long end as persistent fiscal and inflation concerns pushed the 30-year yields above 5.30% to its highest level since 2007. However, it was only temporary relief as yields subsequently retraced as concerns over elevated issuance and the fiscal outlook remained.
Separately, Fed minutes from the July meeting reinforced a more hawkish policy backdrop, with several officials expressing concern that inflation remained elevated and indicating that further tightening could be warranted. While the Fed kept rates unchanged at 3.50%-3.75%, the minutes highlighted a more divided Committee and reduced conviction around near-term rate cuts. The more hawkish policy outlook, alongside persistent fiscal concerns, continued to put upward pressure on both the front and long ends of the Treasury curve, partly offsetting the supportive technical impact of the larger buyback programme.
☕️ Quick fire happenings to note
🌏 Global macro
- US housing starts fell 12.4% m/m to a 1.24mn annualised pace in July, below expectations and marking the lowest level since early 2023. The decline was driven by weaker single-family construction, highlighting continued pressure on housing activity from elevated rates and softer demand.
- China’s economic momentum weakened further in July, with industrial production growth slowing to 4.5% y/y from 5.3% y/y in June, while retail sales growth eased sharply to 0.6% from 1.0%, well below expectations. Fixed-asset investment also fell 6.7% y/y for the first seven months, extending its decline from 5.7% previously. The data point to persistent weakness in domestic demand and investment, despite resilient exports and continued strength in AI-related manufacturing.
- PBOC kept the 1Y and 5Y loan-prime rates unchanged at 3.00% and 3.50% respectively, for a 15th consecutive month, suggesting policymakers remain cautious about further monetary easing. At the same time, the Chinese government signalled that it would step up fiscal support, including faster deployment of already-approved infrastructure projects and additional interest subsidies for households and small businesses.
🏦 Individual stocks/companies
- Alibaba Group Holding Ltd (-7.71% past 5D) shares were volatile last week, initially coming under pressure after its quarterly results showed adjusted EPS of RMB 8.52, below the RMB 10.72 consensus, despite strong AI momentum with cloud revenue rising 45% y/y. The stock recovered slightly on Friday as investors focused on accelerating AI and cloud growth and signs of improving profitability in its core businesses.
- Walmart Inc (-9.61% past 5D) shares declined nearly 10% last week after quarterly results pointed to a sharper-than-expected slowdown in US consumer spending. Comparable sales rose just 2.6%, below the 3.8% consensus and marking Walmart’s slowest growth in six years, while its Q3 EPS guidance also came in below expectations. Management additionally flagged the impact of higher fuel prices on consumers, with the sell-off erasing more than US$80bn in market value and weighing on broader retail stocks.
- UltraGreen.AI Ltd (-41.46% past 5D) shares fell more than 40% in a single session last Thursday after concerns emerged over intensifying competition in its key US market. The stock came under heavy selling pressure after reports highlighted that Zydus Lifesciences had received FDA approval for a generic version of IC-Green, while Provepharm was also preparing to enter the market. With the Americas accounting for around 75% of UltraGreen's 1H revenue, investors grew increasingly concerned that new competition could pressure pricing and margins, prompting DBS to downgrade the stock to Hold and cut its target price to US$0.80 from US$1.95.
🇸🇬 Singapore related
- Singapore’s National Day Rally focused on strengthening households and building long-term resilience amid a changing global environment. Prime Minister Lawrence Wong announced expanded family support, including more childcare leave and enhanced financial support for children, alongside higher BTO and Executive Condominium income ceilings. The Government also outlined longer-term plans to harness AI while introducing safeguards, and major infrastructure investments including a potential new western island and expanded connectivity across Singapore’s outer islands.
