SG Morning Brief | Apple Hits ATH on China AI Deal, PPI Confirms Disinflation; TSMC + Netflix Tonight

US Overnight

The S&P 500 rose 0.38% to 7,572.40, the Nasdaq gained 0.62% to 26,269.23, and the Dow added 150.37 points (+0.29%) to 52,658.64, marking a second consecutive advance for all three. The session saw a remarkable split: the Magnificent Seven (ex-Tesla) rallied 3-4% each while the chip sector sold off again. Apple hit an all-time high after its AI partnership with Alibaba completed regulatory filing in China — opening the world's largest smartphone market to Apple Intelligence. June PPI fell 0.3% month-over-month (consensus flat), the second consecutive inflation surprise in two days following Tuesday's CPI plunge to 3.5%. May PPI was also revised sharply lower, from +1.1% to +0.6%. Core PPI rose 0.2% versus 0.3% expected. The two-day CPI-PPI combination is the most deflationary signal since the Iran war began.

Key Movers

Apple (AAPL) +4%, new ATH — Apple surged 4.01% to a record high after completing the China regulatory filing for its AI partnership with Alibaba. The deal allows Apple Intelligence to run on iPhones in mainland China for the first time, unlocking the world's largest market for on-device AI. Alibaba rose nearly 5%, leading the Nasdaq Golden Dragon China Index up roughly 3%. The broader Mag 7 followed: Alphabet gained 3.2%, Meta 3.1%, Amazon 3%, and Microsoft 2.8%. Tesla was the sole decliner.

BlackRock (BLK) +6.6% / Morgan Stanley (MS) ATH — BlackRock jumped 6.6%, its best day in over a year, after Q2 EPS of $13.91 beat the $12.69 consensus and revenue of $7.08 billion topped the $6.73 billion estimate. Morgan Stanley closed at a record high after posting EPS of $3.46 (vs $2.94) on revenue of $21.35 billion (vs $19.64 billion). Together they confirm the asset management and investment banking earnings cycle is the strongest since 2021.

Chips reversed: SK Hynix -9% / SanDisk -8% — The chip selloff resumed after Tuesday's brief rebound. SK Hynix ADR dropped 9%, SanDisk fell over 8%, and Micron slid 8%. Nvidia swung from -3% intraday to barely positive at the close — the most volatile intraday session for the stock in weeks. The SOX fell over 2%, continuing the pattern of hardware selling while software and mega-cap tech rally.

SGX Preview

The STI was near 5,070. DBS near S$62.18, UOB near S$37.91. The Apple-Alibaba China AI deal is directly relevant for Singapore investors with China tech exposure. The back-to-back CPI/PPI deflationary surprises are the most bullish inflation signal since the war began — if sustained, MAS could begin easing by Q4. Tonight's TSMC earnings will be the single most important data point for the semiconductor trade this quarter.

Asia Pre-Market

SpaceX fell below its $135 IPO price during Wednesday's session for the first time since its debut, closing down roughly 2%. The stock has slumped for four consecutive sessions since joining the Nasdaq-100. The back-to-back inflation beats (CPI 3.5%, PPI -0.3% MoM) have pushed rate hike odds further toward zero. Bond yields continue to ease.

Today's US Earnings and Economic Calendar

Earnings Spotlight: TSMC — The most consequential chip earnings report of Q3. TSMC's AI revenue guidance will determine whether the semiconductor correction was a healthy pullback or the beginning of a structural repricing. After SK Hynix's HBM4 mass production announcement and 27% rally on Tuesday, followed by a 9% reversal on Wednesday, the memory trade is whipsawing on every headline. TSMC provides the definitive view from the foundry side: if AI wafer demand is accelerating, the chip correction ends. If guidance disappoints, the selloff deepens.

One More Thing

CPI at 3.5%. PPI at -0.3% monthly. Two days, two deflationary prints, both below expectations. The Iran war's inflation shock is unwinding in real time. But here is the catch: June's data captures oil at $72. July's data will capture oil at $78-83 after Trump's Hormuz blockade reinstatement. The disinflation window may be one month wide. If TSMC confirms tonight that AI demand is accelerating and the Fed has cover to hold, the market gets the best possible setup for Q3: falling inflation, strong earnings, and no hike. If TSMC disappoints, the chip correction resumes and the only winners are the Mag 7 names that sell products, not the ones that build infrastructure.

This briefing is for informational purposes only and does not constitute investment advice.