T-bill yield rebounds with slower Fed rate cuts: Weekly Market Recap

I spent this week in Taiwan for a short holiday, where the chill in the air was much colder than I expected for this time of year. What stood out most, however, was the festive Christmas atmosphere all around.

This break also gave me a chance to reflect on 2024—what a year it’s been for global equities. The US stock market hit record highs, while Singapore stocks reached a 17-year high. 

We’ve rounded up the three best-performing Singapore blue-chip stocks of 2024 here.

Even while away, I kept an eye on the final Federal Reserve meeting of the year. 

The Fed signaled fewer rate cuts for 2025 than previously expected, leading to a rebound in bond yields. Singapore’s T-bill yield also ticked up slightly to 3.02%.

In this environment, what investment opportunities should we consider? Check out insights from the iFAST research team on where to consider putting your money to work.

As 2024 comes to a close, it’s a great time to reflect, restart, and look forward to new possibilities.

On behalf of the Beansprout team, I wish you and your loved ones a Merry Christmas filled with peace, joy, and hope for the year ahead!

Happy growing! 

Gerald, Founder of Beansprout

⏰ This Week In Markets

🏛 Fed indicates slower pace of rate cuts

What happened? 

The US Federal Reserve (Fed) reduced its benchmark interest rate by 0.25% to 4.25-4.50%, as expected. 

More notably, the Fed signalled fewer rate cuts ahead, now projecting two 25 bps reductions in 2025, compared to four cuts forecasted in September 2024.

What does this mean?

The slower pace of projected rate cuts highlights the continued strength of the US economy and persistent inflation concerns.

According to the CME FedWatch Tool (as of 20 December 2024), investors have adjusted their expectations, now anticipating just one additional 0.25% (25 basis points) rate cut in 2025.

Why should I care? 

Global stocks took a sharp hit as expectations for rate cuts moderated.

The S&P 500 and STI both declined by over 2%, retreating from the multi-year highs reached last week.

Explore our analysis to understand what the slower pace of rate cuts could mean for your savings and investments.

🚗  Moving This Week

• SIA’s passenger traffic rose 8.3% in November compared to the previous year. However, its passenger load factor fell 0.8 percentage point to 87% due to an increase in flight capacity.
• CapitaLand Investment (CLI) has sold its stapled securities in CapitaLand Ascott Trust (CLAS) for S$162 million. More than 185 million stapled securities, which represent about 4.9 per cent of CLAS, were sold to an unrelated party, which agreed to buy them based on their Dec 18 closing price. Read more here.
• CapitaLand Ascendas Reit is proposing to acquire logistics property DHL Indianapolis Logistics Center in Whiteland, Indianapolis, Indiana, for S$150.3 million from DHL USA. Following this, DHL USA will enter a long-term leaseback of about 11 years till December 2035. Read more here.
• CDL Hospitality Trusts is venturing into the student accommodation business for the first time, with the purchase of a purpose-built student accommodation (PBSA) in Liverpool, United Kingdom. The whole site, including the PBSA and a piece of vacant land adjacent to the student accommodation asset, was acquired for £37.3 million (S$63.9 million). Read more here.
• Cromwell European REIT has sold two office properties in Italy for €20.9 million ($29.6 million), which is at a blended 7.7% premium to the latest valuations. Separately, the REIT announced that it has secured new leases for five major properties with new and existing tenant-customers across both its logistics and office portfolios in 4QFY2024.Read more here.

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 The Big Important Story

3 best-performing Singapore blue-chip stocks in 2024

We round up the three best-performing Singapore blue-chip stocks and look at their prospects for 2025.

🤓 What we're looking out for next week

• Tuesday, 24 Dec: Christmas Eve
• Wednesday, 25 Dec: Christmas Day
• Thursday, 26 Dec: Singapore Savings Bond application closing date

Check out the full list of Singapore stocks, REITs and ETFs with upcoming dividend payments with our dividend calendar.

Source: SGX, Bloomberg, Refinitiv

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