Stocks mixed as Fed flags rising economic uncertainty: Weekly Market Recap

This week’s Money Diaries guest, Ping Theng, got me thinking about how to structure my own investment portfolio.

She shared a thoughtful approach of splitting her investments into three parts: a safe and guaranteed portfolio, a high yield portfolio, and a growth portfolio.

Her safe and guaranteed portfolio provides peace of mind with consistent cash flow, even if it doesn’t always keep up with inflation. That’s especially relevant now, with the 6-month Singapore T-bill yield dropping to just 2.3% this week.

Then there’s her high yield portfolio, aimed at beating long-term inflation and reaching financial freedom before age 55. Dividend stocks like Singapore banks are a key part of this strategy, with DBS announcing a dividend per share of $0.75 dividend this week. I also had a chance to speak with UOB’s investor relations team about how they’re navigating the trade war uncertainty. If you missed it, you can catch the replay of the corporate connect webinar here.

If you’re considering bond ETFs to boost your yield now that interest rates are falling, don’t miss our upcoming ask-me-anything (AMA) with Nikko Asset Management. Sign up for the webinar to get your questions answered, or pre-submit your questions here.

Ping Theng also has a growth portfolio featuring passive index ETFs, like the S&P 500 ETF, to target higher returns. Given the uncertainty around US trade policy, I’ve been thinking more about diversifying outside the US too. We dive into a newly listed ETF in Singapore that offers exposure to Asia’s fastest-growing markets.

One of Ping Theng’s key takeaways really struck me: We can’t ignore inflation when planning for the long term. Investing wisely is one of the best ways to outpace it.

Happy growing!

Gerald, Founder of Beansprout

⏰ This Week In Markets

🏛 Fed notes increasingly uncertain economic outlook

What happened? 

The US Federal Reserve (Fed) kept its benchmark interest rate unchanged at 4.25-4.5%, as widely expected. 

However, the Fed warned that “uncertainty about the economic outlook has increased further” and “the risks of higher unemployment and higher inflation have risen.”

What does this mean?

Fed Chairman Jerome Powell shared that the Federal Reserve is in a “wait and see” mode as it monitors the impact of Trump’s tariffs. 

According to the CME Fedwatch Tool, investors expect the Fed to keep interest rates steady at the upcoming meeting in June, with potentially three rate cuts in the second half of 2025. 

Meanwhile, there appears to be progress made in trade negotiations with a US-UK trade deal unveiled, and trade talks between the US and China set to take place in Switzerland this weekend. 

Why should I care? 

The S&P 500 pulled back slightly await as investors await the outcome of US-China trade talks. 

Singapore stocks saw modest gains as DBS, UOB and OCBC reported mixed results and took additional pre-emptive provisions for bad debt with rising economic uncertainty. 

🚗  Moving This Week

• DBS reported net profit of S$2.9 billion for the three months ended Mar 31, 2025, 2 per cent lower than the S$2.95 billion from the year-ago period, and slightly above consensus forecast of S$2.87 billion. The company declared a total dividend of S$0.75 per share for Q1, comprising an ordinary dividend of S$0.60 and a capital return dividend of S$0.15. Read more here.
• UOB reported net profit of S$1.49 billion in 1Q 2025, unchanged from 1Q 2024, and below market expectation of S$1.54 billion. Credit costs in 1Q 2025 rose to 35 basis points (bps) from 25 bps in 4Q 2024, as UOB set aside additional pre-emptive allowance to strengthen provision coverage amid growing macroeconomic uncertainties. Read more here.
• OCBC reported net profit of S$1.88 billion for 1Q 2025, 5% lower compared to 1Q 2024, but above consensus forecast of S$1.86 billion. The lower profit was driven by lower net interest income and higher operating expenses. Read more here.
• ST Engineering’s revenue rose 8 per cent to S$2.9 billion for the first quarter ended March, from S$2.7 billion in the corresponding year-ago period, supported by very strong growth in its defence and public security segment. The company reported contract wins amounting to S$4.4 billion for Q1, bringing its order book to S$29.8 billion as at Mar 31. Read more here.
• AIMS APAC REIT (AAREIT) reported a distribution per unit (DPU) of 9.6 cents for FY2025, a 2.6% year-on-year (YoY) increase compared to FY2024. Read our analysis here.
• Frasers Hospitality Trust (FHT) reported distributable per unit (DPU) of 1.0257 cents in 1H FY25, a decline of 6.0% from 1H FY24. Read our analysis here.
• Lendlease REIT (LREIT) reported positive rental revisions for the nine months ending 3Q FY25, with retail rentals rising by 10.4% and office leases seeing a 13% uplift. Read our analysis here. Read our analysis here.
• Acrophyte Hospitality Trust reported Net Property Income (NPI) of US$5.3 million in 1Q 2025, representing an 18.1% year-on-year decline. Read our analysis here. 

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 The Big Important Story

Diversifying into Asian stocks? Here’s a new Exchange Traded Fund (ETF) to watch

We explore how the newly listed Amova MSCI AC Asia ex Japan ex China Index ETF provides investors with targeted exposure to Asia’s fastest-growing markets.

🤓 What we're looking out for next week

• Monday, 12 May: Singapore public holiday
• Tuesday, 13 May: Prime US REIT earnings, US CPI data
• Wednesday, 14 May: United Hampshire US REIT, EC World REIT earnings, Beansprout AMA on Singapore Bond ETFs with NikkoAM
• Thursday, 15 May: Manulife US REIT, Sasseur REIT, Singapore Airlines, SingPost earnings
• Friday, 16 May: DBS ex-dividend

Get the full list of stocks with upcoming dividends here. 

Source: SGX, Bloomberg, Refinitiv

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