Weekly recap: S&P 500 hits record high

The US stock market got off to a roaring start in 2024, with the S&P 500 exceeding its previous peak.

The improved sentiment has been driven by an easing of inflation and expectations of interest rate cuts. 

To understand if the rally can be sustained, we analyse whether inflation would continue to ease in 2024. 

In the meantime, interest rates continue to fluctuate. 

The cut-off yield for the latest 6-month Singapore T-bill fell to 3.7% from 3.74% in the previous auction.

We discuss if it might be more worthwhile to apply for the upcoming 1-year T-bill auction.

If you are thinking of making your CPF savings work harder, we also do the sums to find out if it might be worth putting our CPF OA funds into a 12-month fixed deposit offering 2.9% per annum.

Lastly, we share why we would consider waiting for the next SSB rather than apply for the latest SSB based on our SSB interest rate projections. 

🚀 S&P 500 HITS RECORD HIGH

What happened? 

Taiwan Semiconductor Manufacturing Company (TSMC) expects to return to solid growth this year. 

This follows stronger than expected earnings in the fourth quarter, where its revenue from high-performance computing applications, including generative artificial intelligence (AI), surged. 

What does this mean?

TSMC’s more positive outlook was driven by an anticipated recovery in smartphone, chip and computing demand. 

The chipmaker also raised the possibility of increasing capital spending in 2024, lifting hopes of a broad recovery in the technology sector. 

Why should I care? 

The S&P 500 hit a record high with gains led by tech stocks with improved sentiment. 

If you are keen to invest in the US market, check out our guide to the best S&P 500 ETF.

Mega-tech stocks have been under the spotlight with the AI boom. We dive deeper to understand the prospects of these companies in the year ahead.

• Nvidia’s stock tripled in 2023. Can its rally continue?
• Google just launched its Gemini AI model. Can its share price catch up? 
• Microsoft becomes world's most valuable company. Here’s why the stock is well-liked

💡 THE BIG IMPORTANT STORY

What are active ETFs and should you invest in them?

The first active exchange-traded fund (ETF) in Singapore is set to list on Jan 31.

🚗 WHAT'S MOVING

• Singapore Airlines (SIA)’s group passenger traffic grew 15.8% in December 2023 compared to the previous year. However, its passenger load factor decreased slightly to 89.4% with an increase in capacity.
• Yangzijiang Shipbuilding has secured a contract to build six 13,000 twenty-foot equivalent units (TEU) dual-fuel containerships for Ocean Network Express (ONE). 
• Wilmar’s Chinese subsidiary Yihai Kerry Arawana has denied allegations by a city prosecution agency that one of its units was partially accountable for a trade fraud that led to a 5.2 billion yuan (US$725 million) loss for a state-owned company.
• AEM Holdings has uncovered a shortfall in its inventory levels when it was doing its year-end 2023 internal stock-taking exercise. The shortfall is estimated to be between 5-7% lower than the $358.6 million previously reported on November 9, and will hurt its profitability for the year ended Dec 2023. 

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

🤝 LEARN AND INVEST WITH WEBULL

 Microsoft becomes world's most valuable company. Here’s why the stock is well-liked

Microsoft overtook Apple to be the world's most valuable listed company by market capitalisation recently.

🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK

• Tuesday, 23 Jan: Netflix earnings
• Wednesday, 24 Jan: Mapletree Logistic Trust, Suntec REIT earnings, Tesla earnings
• Thursday, 25 Jan: Mapletree Industrial Trust earnings, Singapore 1-year T-bill auction
• Friday, 26 Jan: Keppel DC REIT earnings, SSB closing date

Source: Bloomberg, SGX 

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