In today’s briefing:
- HK Strategy: Sell in May, Go Away? The History Says Yes!
- Chartered Insights: The Fallout of Indo-Pak Trade Suspension April,2025
- US Banks – Off Balance Sheet, Decline of C&I Commitments, Not A Good Sign
- Ohayo Japan | Flat Ahead of Big Tech Earnings
- Japan – New Loan Officer Survey Is Positive for Lending Growth, for Banks, Underlying Economy
- Furniture/Furnishings Weekly: Gen Z Pushes RTO; Chinese Imports Drop
- Biopharma Week in Review: Makary Sparked FDA Optimism; Growing Pushback on HHS Changes
- Sustainable Investing Surveyor Focus on Westwater Resources
HK Strategy: Sell in May, Go Away? The History Says Yes!
- Statistics supported “Sell in May, go away” for the HSI. Since 2013, the average return for May is -2%, and is negative in 8 out of the last 12 years.
- On average, May is the worst month since 2020, too. This even eclipsed the month of Oct, which is widely believed to be normally the worst month.
- If a weak May happens, the heavily weighted yet strongly performed constituents like BYD (1211 HK), Alibaba Group (9988 HK), and Xiaomi Corp (1810 HK) are to suffer.
Chartered Insights: The Fallout of Indo-Pak Trade Suspension April,2025
- Pakistan’s suspension of bilateral trade with India impacts supply chains, but India’s diversified trade routes through third countries like Dubai and Singapore provide resilience.
- India’s trade surplus with Pakistan is at risk, particularly in key sectors like pharmaceuticals, tea, and fertilizers, which could cause supply disruptions in Pakistan.
- India’s economy remains largely unaffected due to negligible imports of $0.48 Million, while Pakistan faces heightened inflation and shortages of critical goods, deepening economic strain.
US Banks – Off Balance Sheet, Decline of C&I Commitments, Not A Good Sign
- A commercial & industrial (C&I) loan commitment is a commitment to lend that a bank provides a company for a fee, so that draw-down can be immediate, when needed
- Granular quarterly data from the Fed shows unused C&I loan commitments down USD142bn QoQ in 4Q24 or -5.2% QoQ.
- The only other time there was such a sharp contraction was in 1Q20 when it was -12.5% QoQ or where it was down USD266bn QoQ.
Ohayo Japan | Flat Ahead of Big Tech Earnings
- Stocks ended mixed, recovering from early losses as investors focused on upcoming Big Tech earnings and economic data
- Hitachi unveiled a three-year management plan targeting growth through artificial intelligence with a 500 billion yen investment in new businesses
- Komatsu forecasts a 30% decline in net profit to 309 billion yen, driven by a 79 billion yen cost increase from U.S. tariffs and yen appreciation
Japan – New Loan Officer Survey Is Positive for Lending Growth, for Banks, Underlying Economy
- The BOJ released its loan officer survey on 21 April which is generally positive for lending demand at firms and eased credit standards (willingness to lend)
- Demand for credit over past 3 months for firms, 43 respondents were about the same, 6 were moderately stronger, 1 substantially stronger. No respondents were weaker
- Lending policies saw most respondents unchanged, but there were some as ‘eased somewhat’ and 1 ‘eased considerably’ with no respondents reporting tightening
Furniture/Furnishings Weekly: Gen Z Pushes RTO; Chinese Imports Drop
- Market retracement as policy volatility remains high.
- The WTR Commercial/Contract Furniture Index was up 4.8%, the Residential Manufacturers & Suppliers Index was up 4.9%, and the Home Goods Retailers Index improved by 9.7% as the broader indices surged higher.
- Gen Z pushing for Return-to-Office (1). Over the past year, many firms have begun pushing harder for employees to return to the office in order to enhance corporate culture, improve learning and networking opportunities for employees, and enhance organizational agility and innovation.
Biopharma Week in Review: Makary Sparked FDA Optimism; Growing Pushback on HHS Changes
- FDA Commissioner Martin Makary injected some regulatory optimism with his first public comments, advocating for accelerated drug approval pathways.
- While biopharma headlines were a roller coaster, investors appeared ready to grasp any positive news, despite more signs of FDA dysfunction.
- In an E&Y report reviewed by Reuters, 25% pharma tariffs would increase drug costs by $51 billion, leading to either 12.9% higher prices or reductions in R&D efforts and workforce.
Sustainable Investing Surveyor Focus on Westwater Resources
- The WTR Sustainable Index was up 4.3% W/W versus the S&P 500 Index (up 4.6%), the Russell 2000 Index (up 4.1%) and the Nasdaq Index (up 6.4%).
- Energy Technology (12.6% of the index) was up 5.1%, while Industrial Climate and Ag Technology (47.1% of the index) was up 5.6%, ClimateTech Mining was down 1.0%, and Advanced Transportation Solutions (21.3% of the index) was up 5.8%.
- Top 10 Performers: AMY, PLL, AVL, IRBT, SLI, COMM, PE, NGPHF, MEOH, HSC
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