📦 US trade deficit widens: AI demand is quietly pulling in more imports ✈️
The US goods trade deficit widened sharply in May to US$105.8 billion.
That was much higher than the US$85 billion economists expected, and the biggest shortfall in more than a year.
Why did it happen? Two things:
Exports fell 5.4%, partly because oil shipments pulled back after April’s surge. Imports rose 3.6% to the highest level since early 2025. The interesting part is what the US is importing.
Capital goods imports: including semiconductors, computers and telecom equipment — are up nearly 42% from a year ago.
In simple terms: the AI infrastructure boom is not just a tech story. It is also showing up in trade data.
More data centres, chips, servers and telecom equipment = more imported capital goods.
Strong domestic demand and AI investment are supporting growth, but they also widen the trade deficit. And because trade deficits subtract from GDP calculations, this becomes another quiet headwind for the US economy.
Source: Hump Days / Bloomberg
The US goods trade deficit widened sharply in May to US$105.8 billion.
That was much higher than the US$85 billion economists expected, and the biggest shortfall in more than a year.
Why did it happen? Two things:
Exports fell 5.4%, partly because oil shipments pulled back after April’s surge. Imports rose 3.6% to the highest level since early 2025. The interesting part is what the US is importing.
Capital goods imports: including semiconductors, computers and telecom equipment — are up nearly 42% from a year ago.
In simple terms: the AI infrastructure boom is not just a tech story. It is also showing up in trade data.
More data centres, chips, servers and telecom equipment = more imported capital goods.
Strong domestic demand and AI investment are supporting growth, but they also widen the trade deficit. And because trade deficits subtract from GDP calculations, this becomes another quiet headwind for the US economy.
Source: Hump Days / Bloomberg
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DDR5 memory chip prices have increased by more than 4x over the past year.
This is why companies like Apple and Microsoft are raising prices on products like Macs, iPads and Xbox consoles.
The simple reason: AI needs a lot of memory chips. After the pandemic, the chip industry had too much supply, so manufacturers cut back on capacity investment. But just as supply was being reduced, AI demand started exploding.
Now the remaining memory chip producers are in a very strong position:
Demand is high.
Supply is tight.
Customers are desperate.
Prices are rising.
Micron’s CEO said there is “no line of sight” to when supply will catch up with demand, with meaningful improvement unlikely before 2028.
Even with huge investments coming:
- Samsung is expected to announce a US$651 billion investment package over the next decade
- SK Hynix plans to double capacity over five years
- TSMC is spending US$56 billion on capex this year
- Micron is building new factories in Idaho and New York
Chip prices may still stay elevated through at least 2027....
AI is not only pushing Nvidia higher. It is also pushing up the cost of memory, devices, servers and electronics. The AI boom is becoming an inflation story too.
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👉 If you open your SRS account and make your FIRST contribution by TODAY, you'll lock in your withdrawal age at 63 permanently.
It literally takes 2 minutes:
1️⃣ Open your DBS / UOB / OCBC app
2️⃣ Search "SRS Account"
3️⃣ Open the account
4️⃣ Transfer just $1 (yes, $1 is enough)
💰 Why bother?
✅ Every dollar you contribute reduces your taxable income (subject to the annual SRS contribution cap).
✅ You get 1 extra year of withdrawal flexibility in retirement.
✅ Even if you don't plan to use SRS now, locking in the earlier withdrawal age costs almost nothing.
https://www.dbs.com.sg/personal/support/bank-account-srs-account-opening.html
https://www.ocbc.com/personal-banking/investments/supplementary-retirement-scheme-account
https://www.uob.com.sg/personal/invest/srs-account.page
I genuinely think this is one of those "future you will thank you" moves.
⏰ Deadline: TODAY (30 June) before the banks' cut-off / end of day.
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The US added only 57,000 jobs in June, below almost every economist’s forecast.
After a few months of stronger hiring, this is a sign that the labour market may finally be cooling.
The participation rate also fell to 61.5%, the lowest in more than 5 years.
Why markets care: A weaker jobs report usually gives the Fed more reason to pause, or eventually cut rates, because the economy may not be as strong as before.
This is not automatically “bad news”. For investors, a softer labour market can actually be good if it lowers interest rate pressure without triggering a recession. The key thing to watch is whether this is a one-off weak report, or the start of a real slowdown.
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The Iran war’s fuel price shock has pushed American drivers to make real sacrifices at the pump. Sales of premium gasoline fell nearly 5% by volume in late June compared to pre-war levels, while regular gas sales rose about 10%, as drivers across income levels trade down to cheaper fuel grades to cut costs.
The 90-cent spread between premium and regular gas has hit an all-time high, with regular averaging $3.81 a gallon and premium at $4.70.
Analysts expect that gap could widen to a dollar by year-end even as crude prices ease. Automakers have been producing more vehicles that require premium gas while refiners have been slow to expand higher-octane production capacity.
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📅 Key Market Events to watch this week 🚨
This week has a few important US data points that investors will be watching.
Main ones:
US Services PMI
ISM Non-Manufacturing PMI
Crude Oil Inventories
FOMC Meeting Minutes
Initial Jobless Claims
10-Year and 30-Year bond auctions
After the weaker jobs report, markets will be looking for clues on whether the US economy is cooling gradually or slowing too fast. Bond auctions and Fed minutes also matter because they can move Treasury yields.
Expect markets to react more strongly to economic data in the short term. When investors are unsure about growth and interest rates, even one data release can shift sentiment quickly.
This week has a few important US data points that investors will be watching.
Main ones:
US Services PMI
ISM Non-Manufacturing PMI
Crude Oil Inventories
FOMC Meeting Minutes
Initial Jobless Claims
10-Year and 30-Year bond auctions
After the weaker jobs report, markets will be looking for clues on whether the US economy is cooling gradually or slowing too fast. Bond auctions and Fed minutes also matter because they can move Treasury yields.
Expect markets to react more strongly to economic data in the short term. When investors are unsure about growth and interest rates, even one data release can shift sentiment quickly.
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🇸🇬 Free Money from Ah Gong again ❤️
GSTV cash payouts are coming next month, with more than 1.5 million eligible Singaporeans set to receive up to S$850 !!!
Source: https://cna.asia/4wzjVsh
GSTV cash payouts are coming next month, with more than 1.5 million eligible Singaporeans set to receive up to S$850 !!!
Source: https://cna.asia/4wzjVsh
Nearly a third of the S&P 500 (about 33%) now sits in just the "Magnificent 7". If the index is your ONLY holding, your returns are effectively riding on a handful of tech names — you're more concentrated than you think.
And we just watched what concentration can do. On 23 June, Korea's KOSPI plunged almost 10% in a single day — its biggest point drop on record — because just two chip stocks, Samsung and SK Hynix, make up nearly HALF that index. When they fell, the whole market fell with them. It rebounded within days, but that's the point: concentration means someone else's bad week becomes your bad week.
Does that mean sell everything? No.
S&P earnings estimates are still being revised upward (~$336 consensus for 2026, ~$385+ projected for 2027) — the fundamentals are holding up. The issue isn't the market. It's holding ONE market and calling it a portfolio.
The fix is simpler than people think: spread exposure across regions and sectors that don't move together. Emerging markets, for instance, are up over 25% this year — and most portfolios I see intially have ZERO exposure there.
When did you last stress-test your portfolio for concentration risk? If the answer is "never" or "not sure", a conversation with me is a lot cheaper than finding out the hard way 🤐
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🚨🇰🇷 Shares of South Korean chipmaker SK Hynix have plummeted by 16% in Seoul, marking a record daily decline.
Last Friday, SK Hynix listed its American Depositary Receipts (ADRs) on Nasdaq, with the offering oversubscribed seven times. The ADRs initially surged by 15% during debut trading, providing investors with an opportunity to buy at peak prices💵
Last Friday, SK Hynix listed its American Depositary Receipts (ADRs) on Nasdaq, with the offering oversubscribed seven times. The ADRs initially surged by 15% during debut trading, providing investors with an opportunity to buy at peak prices
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🇮🇷 🇺🇸 Iran ceasefire has collapsed 🚨 🔥
The fragile U.S.-Iran interim peace deal has effectively broken down.
Both sides have abandoned the memorandum of understanding signed last month and returned to an escalating cycle of military strikes.
Iran killed two American service members in Jordan, leading to U.S. retaliatory strikes on Qeshm Island and multiple southern Iranian cities.
Iran then targeted Kuwait’s power and desalination infrastructure, launched drones at U.S. bases in Kuwait and Bahrain, and fired missiles that were intercepted over Jordan.
The IRGC Navy also halted four tankers attempting to pass through the Strait of Hormuz.
This raises fresh concerns over energy markets because Hormuz is one of the world’s most important oil transit routes.
The fragile U.S.-Iran interim peace deal has effectively broken down.
Both sides have abandoned the memorandum of understanding signed last month and returned to an escalating cycle of military strikes.
Iran killed two American service members in Jordan, leading to U.S. retaliatory strikes on Qeshm Island and multiple southern Iranian cities.
Iran then targeted Kuwait’s power and desalination infrastructure, launched drones at U.S. bases in Kuwait and Bahrain, and fired missiles that were intercepted over Jordan.
The IRGC Navy also halted four tankers attempting to pass through the Strait of Hormuz.
This raises fresh concerns over energy markets because Hormuz is one of the world’s most important oil transit routes.
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The U.S. has reimposed its blockade on Iranian ports and scrapped the oil export sanctions waiver.
That reverses the economic concessions that briefly helped bring oil prices down.
The U.S. has also sent additional F-16s and F-35s to the region, suggesting preparation for further escalation.
Brent crude surged back toward US$88 per barrel on Friday, marking its biggest weekly advance since April.
Tanker traffic through Hormuz has also dropped again, while attacks on energy infrastructure raised fears of sustained supply disruption.
The June CPI report had offered a short period of inflation relief from lower gasoline prices.
But if hostilities continue, that relief could reverse....
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The AI euphoria that pushed markets to all-time highs just a month ago is fading. Tech was the worst-performing S&P 500 sector last week.
The Nasdaq 100 fell 4.1%, while the Philadelphia Semiconductor Index dropped 10%, its worst week since April 2025.
SpaceX also fell below its IPO price after losing 25% over two weeks and wiping out US$1 trillion from its peak market cap.
Investors are becoming more uncomfortable with the scale of AI capital expenditure.
Alphabet alone is projected to spend US$187 billion this year. The four biggest hyperscalers combined are forecasting up to US$725 billion in capex.
The next two weeks of Big Tech earnings will be the key test, with Alphabet, Tesla, Microsoft, Meta, Apple and Amazon reporting in quick succession. Analysts will be watching cloud margins, AI revenue per dollar of compute, and whether capex growth is slowing or accelerating.
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HSBC sells Singapore insurance business to Germany’s Allianz in US$2.09 billion deal
Allianz’s purchase of HSBC Life Singapore arrives roughly two years after its previous attempt to significantly expand its local footprint ended in controversy.
https://bt.sg/uwGh
Allianz’s purchase of HSBC Life Singapore arrives roughly two years after its previous attempt to significantly expand its local footprint ended in controversy.
https://bt.sg/uwGh
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