June 2016 In Review, July Preview


I guess June 2016 will be remembered for the event that never shook the world – Brexit. For all its hype and build-up, the event brought world markets to its knees for only two sessions. Within a week, everything was almost back to where it started. Loads of people lost trillions in the markets while many others stayed out. Institutions, it seems, were the worst hit. The worst may not be over yet. But until the next chapter in Brexit, the world and the markets have already moved on to worry about other things.

I will remember my June 2016 as a glorious dream realised when I vacationed in Switzerland for the first time in my life. It was everything I had imagined and more … much more. I have fallen in love. I must go back again and fill in the rest of what I have missed.


It seemed like everywhere you point and shoot, you end up with picture postcard perfection.


What I love best about cold countries is that I get to deck myself out with black over black and look badass!



The Tutorial Classes in 2016 have been sold out back-to-back-to- back. This hasn’t happened since November 2007 till June 2008. With the August batch two months away, it is already more than 60% filled with a list of KIVs yet to confirm.

Sold out

In the last weekend of June, I went back to Penang after a long time. It was good to be back.


On 25 June, I did a preview to a crowd of almost 90 people in Penang and immediately filled 80% of the seats with a list of KIVs still yet to confirm the few remaining seats for the August 26th Batch in Penang. The Malaysian batch in K.L. on August 15 is already more than half full.


On Monday 27 June, we kicked off the second batch of the revised Four-Week Post-Graduate Tutelage. This is a full capacity batch with all 30 seats booked long before the Tutelage began.

The following day, Tuesday 28 June, PTT85 started its Tutorial. This is also a full batch with 35 new students. If the first day’s energy was anything to go by, this will be an interesting batch to teach and I relish the opportunity.


There is a dark side to all this busyness … the last time this happened (November 2007 till June 2008), the economy was not in good shape and everything fell apart in 2008.

So if history is anything to go by, it seems things are repeating itself now and a certain sense of Deja-Vu is in the air.


June is known to be the most unpredictable month of the year while July is the most volatile. Given those reasons, I have been very conservative in my trades, never keeping anything for more than two sessions and sticking to mostly scalps on Crude.

The US market lived up to that unpredictable reputation by giving 2016 its most volatile month yet.

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June gave us the widest range of any single session this year with more than 590 points to the downside on the DOW, even more than January could muster. In two consecutive sessions after Brexit, DOW lost more than 880 points. However, it all came back within the text four days with the 1st of July (Friday) bringing the DOW back to pre-Brexit levels.

Such events often catch out the Bears who had been short on the market and definitely slaughtered the Bulls who had betted on it. Reports from all over are claiming that it wiped out US$3 trillion from the markets.

The US economy on the whole has been showing resilience by dropping its unemployment rate to 4.7%, its lowest since November 2007. However, growth remains subdued, contracting in the last three quarters to +1.1% from 3.9% three quarters earlier.

Its Manufacturing PMI has been falling but stays above the critical 50.0 mark but its Industrial Production has been negative for nine consecutive months and negative for ten of the last 12 months. Its Services PMI is also at the low end at 51.3.

For now, we hold faith in the American economy but I am keeping a very close eye on its weakening numbers. Most of all, I am watching the yield curve with exceptional interest. The spreads are tightening at an increasingly quicker rate that’s flattening the curve on the shorter maturities.

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The spread between the 2/5 is now only 41bps while the 5/10 is 46bps. Thus the 2/10 spread is less than one percentage point at 87bps when it should be 200bps for par.

The behaviour of the bond yields imply that in spite of the positive (albeit weakening) data, investors don’t have faith in risk now and are expecting some sort of slide in the economy and risk markets. I stand amongst those who feel that way and will stay conservative as we go into the worst quarter of the trading calendar.

July Preview

July is the start of quarter three and is the best month in the worst quarter of the year. Having said that, it is also the most volatile month of the trading year. The three months of Q3 are extremely varied with July reputed to be the most volatile, August being the most bearish in the last 25-plus years with no reliable patterns and September, known famously for having the lowest volumes of any month and the most bearish of the calendar year over the last 85-plus years.

July 2016 has 20 full trading sessions and one public holiday (Monday on 4 July). July is known for its volatility with huge swings either way. It is also the start of the third earnings season of the year when companies are known to pull back on their guidance and become conservative about their outlooks.

July Trivia

Key US Economic Dates



Singapore seems to not care about world economics and its own internal frailties as government agencies raised parking rates and utility rates in the last week of June. With that, private parking companies have also seen the need to raise their rates to keep the spread between public and private rates constant. As with all things past, our government has repeated its pattern of raising fees and rates a year after being elected in again. I wouldn’t mind so much if things were status quo and life was great. But it is not great on the streets.

Empty properties are on the rise as commercial real estate demand dries up. Business owners especially among the small to medium retail outlets have found it extremely challenging to keep up with the high rentals while consumers pull back on their spending. With credit also drying up, the end to the flow of cheap money is affecting many who had depended on debt to maintain their way of life. That folly has now caught up with those who did and others are starting to fall victim to their own lavish spending.

This is not surprising given that Singapore’s Households-Debt-To-GDP is amongst the highest in the world at 60.30% of our GDP.

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Others are losing their jobs as banks and financial institutions tighten their belts. The shipping, oil and marine related businesses have also tightened up and cut heads. The new influx of fresh grads in Q2 have not been able to secure any job outside of sales and direct marketing.

Our Inflation Rate continues to be the foremost concern (although our central bank seems to ignore it). For the nineteenth consecutive month, the island state has registered negative inflation (Deflation) with the most recent read being the lowest and the sharpest decline since August 1986 at -1.60%.

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What’s making it worse and threatening to turn this into a full blown Deflation is the slowing of consumer spending, government spending and investor spending. Property prices have tumbled precipitously, catching many unsuspecting property investors out this year. High-end investors have been reported in the mainstream media as dumping or fire-selling their multi-million dollar homes. Foreigners who used to scoop up Singapore properties like candies in a discount store are now looking to off-load their souring investments in a hurry.

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Finally, although I have no numbers to prove this, the numbers of high-performance European Marquis have diminished rather starkly compared to a year ago when almost one in every 20 cars I passed was a Marquis. Even at the parking lot at my training center that used to have lots of such fine machines are now seeing less and less of them as the months go by. I used to drool at these magnificent cars when there were so many of them. These days, there are hardly any of them to drool over anymore.


After April’s and May’s madness, it was good and timely to get a two week break to re-energise. The second half of the year has already started for me last week. I have resumed trading, albeit at a very conservative rate, and it has been profitable so far … difficult, but still profitable.

I am also back to swimming and working out to fight off the extra 4.5kgs I put on while vacationing. Put in 80 laps (4km) on Thursday 29 June and completed it in 01:46:00 for an average of 13 minutes per 10 laps (500m) including four quick stops to adjust my equipment. Still have a bit more to cut down but it’s good to be feeling fitter and faster.

It’s also good to be on the move and working again. I feel blessed and thankful that I can.


Happy Hunting!

I’d like to wish all my Muslim Brothers & Sisters a Selamat Hari Raya Aidilfitri.



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