Will the bull market continue? Weekly recap and what to watch in the week ahead

The US market entered a bull market this week, after the S&P 500 rebounded more than 20% from its low in October. 

This has led many investors to wonder if the rally can be sustained. 

We’ll be watching out closely for the upcoming interest rate decision by the US Federal Reserve, where investors are still largely expecting that we will see a pause in the interest rate hike. 

If you are looking for an ETF that offers you exposure to the US market, check out our guide on how to choose the best S&P 500 ETF.

 📈 A PAUSE OF A HIKE?

What happened? 

The US Federal Reserve will be meeting in the coming week, with investors still largely anticipating that there will be a pause in the rate hikes. 

What does this mean?

Despite surprise interest rate hikes in Australia and Canada this week, a surge in jobless claims in the US has moderated investor expectations of a further rate hike for now. 

However, investors will remain watchful of the latest consumer price index data to be released a day before the Fed rate decision to look for indications on whether inflation has continued to ease.   

Why should I care? 

US bond yields have continued to move up despite expectations of no rate change from the Fed, with the yield on the 2-year US treasury note reaching above 4.6%. 

This has also translated to higher US fixed deposit rates, even as Singapore fixed deposit rates have continued to fall. 

Read our guide on the best US dollar fixed deposit rates in Singapore.

💡 THE BIG IMPORTANT STORY

Latest T-bill yield at 3.84% as non-competitive bids rise. Here’s why it matters

The latest Singapore 6-month T-bill offers a cut-off yield of 3.84% p.a., little changed from the previous auction.

🚗 WHAT'S MOVING

• Apple (AAPL) unveiled several new products at the Worldwide Developers Conference (WWDC), including the Vision Pro mixed reality headset.
• General Motors announced plans to use Tesla’s (TSLA) electric vehicle charging network, and said its vehicles will also utilise Tesla’s North American Charging Standard ports in its cars from 2025.
• Sembcorp Industries (SGX: U96) has signed a S$1.9 billion deal to import natural gas from Indonesia, with the agreement expected to be effective by the second half of 2023. Separately, the company has started a process for a possible divestment of its waste management business and its waste to energy plant.
• Digital Core REIT’s (SGX: DCRU) second largest customer Cyxtera has filed for bankruptcy. The customer contributes about US$16.3 million of 22.4% of the REIT’s annualised rental revenue. According to Digital Core REIT, Cyxtera intends to pay vendors in full for goods and services provided, and has remained current on rental obligations through the month of May.
• Manulife US REIT’s (SGX: BTOU) fifth largest tenant by gross rental income has exercised an early termination of its lease in New Jersey, US, and will vacate the space in May 2024. The tenant represents 3.3% of the REIT's gross rental income, and has paid a termination fee of about US$ 4 million.

Source: Bloomberg, CNBC, Financial Times, Business Times, Edge Singapore

🤝 A MESSAGE FROM OUR PARTNER

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🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK

• Tuesday, 13 June: US Consumer Price Index (CPI)
• Wed, 14 June: US Federal Reserve rate decision

Source: Bloomberg, SGX 

🍭 THAT’S INTERESTING

The unveiling of Apple's Vision Pro mixed reality headset wiped out US$85 billion in the company's market cap in less than an hour. Announced at its Worldwide Developers Conference (WWDC) 2023 as “the world’s most advanced consumer electronics device", the headset will cost a whopping US$3,499 when it hits the stores early next year. 

Source: Bloomberg