Stocks climb as Nvidia lifts AI sentiment: Weekly Market Recap

I do not have kids, but the new SG Child Support Package announced at the recent National Day Rally was a big talking point among my friends who are parents.

What caught my attention was how the support would stretch over many years.

The S$32,000 of Child Credits, for example, will be paid at S$2,000 a year from the year a child turns one until the year they turn 16.

For parents who may not need all of the cash support immediately, we looked at whether it may make sense to invest the excess for their child, top up their CPF, or use a combination of both. 

It made me think about something we sometimes overlook when managing our money: time matters.

Money that I might need next year should probably be treated very differently from money that I will not need for another 10 or 20 years.

For money I may need relatively soon, keeping it safe could matter more. This week, we looked at what led to the jump in the latest 6 month T bill yield to 1.6%, the highest level this year.

If I can set the money aside for much longer, I may be willing to lock in a return for a longer period. We also looked at the latest 10 year Singapore government bond which offers a yield of 2.3%.

And for money that I may not need for many years, I may be more willing to accept market ups and downs in exchange for the potential for higher returns. As Singapore stocks stay close to record highs, we looked at the new EQDP funds as another way to gain exposure to Singapore stocks, and a new ETF offering exposure to Singapore stocks beyond the blue chips.

Time horizon can also affect whether we are investing mainly for growth, or for income today.

That is where our latest podcast interview with the CFO of NTT DC REIT comes in, as we looked at what investors should watch if they are looking for income from their portfolio.

The main takeaway for me this week is simple. Before deciding where to put my money, I should first think about when I will need it.

Happy growing!

Gerald, Founder of Beansprout

⏰ This Week In Markets

📊 Stocks bounce as Nvidia lifts AI sentiment  

What happened? 

Fed Chairman Kevin Warsh signalled that the Fed could still raise interest rates further if inflation does not come down quickly enough.

He said the US economy remains resilient, borrowing costs do not appear to be slowing activity significantly, and inflation is still too high for the Fed to be confident that the problem has been resolved.

What does this mean?

The two year US Treasury yield, which tends to move with expectations for interest rates, rose after the speech. 

Investors saw a greater chance that rates could stay high for longer, or even rise further.

At the same time, Nvidia’s latest results showed that companies are still spending heavily on AI infrastructure. This remains positive for companies exposed to AI, data centres and semiconductors.

What we are watching

Attention will turn to the US labour market next week, with several employment indicators due, including the August nonfarm payrolls report on Friday.

With the next FOMC meeting approaching, employment and inflation data will be important in determining whether the Fed keeps rates unchanged or considers another increase.

For investors, the key tension remains the same. Company earnings are still holding up well, especially in technology, but interest rates may stay high for longer. This could make investors more selective about which stocks they are willing to pay up for.

Why should I care?

Markets ended the week modestly higher, as strong technology earnings helped offset renewed concerns about interest rates.

The S&P 500 rose 0.5% over the week, while the Nasdaq Composite gained 0.8%.

Technology stocks outperformed, supported by strong results from Nvidia and a rebound in software stocks. Microsoft rose 6.3%, while Meta gained 5.1%.

Singapore stocks also edged higher, with the Straits Times Index rising 0.2%, supported by continued strength in financial stocks.

🚗  Moving This Week

• Sembcorp Industries is moving ahead with a potential spin-off listing of its India renewables business. Sembcorp Green Infra has filed its draft red herring prospectus in India, although Sembcorp said no final decision has been made and the IPO remains subject to market conditions and approvals. Bloomberg previously reported that the listing could raise up to US$500 million. Read more here. 
• ST Engineering has secured a S$750 million turnkey rail services contract for the Taoyuan MRT Green Line Extension in Taiwan, further strengthening its rail business. The group will lead project management and systems integration while supplying key rail electronics, with the seven-year project scheduled to commence in 4Q2026. Read more here
• UOB has priced a €1 billion dual-tranche covered bond offering, marking its first euro covered bond issuance of 2026 and the first such dual-tranche deal by an Asian issuer. The offering comprises €500 million of two-year bonds at a 3.118% coupon and €500 million of five-year bonds at a 3.342% coupon. Read more here. 
• Frencken Group plans to raise just over S$100 million through a placement of 44.1 million new shares at S$2.2687 each, a 10% discount to its last VWAP. The proceeds will fund capex across its mechatronics and advanced plastics businesses while providing greater flexibility for strategic investments, acquisitions and joint ventures. Read more here. 
• UltraGreen.ai CEO Ravinder Sajwan bought 961,538 shares for about US$691,000, at an average price of US$0.719 per share, following the recent sharp sell-off. The purchase lifted his deemed interest to 62.21% and came on the same day UltraGreen bought back one million shares, signalling management’s confidence despite concerns over new competition in the US ICG market. Read more here.

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 The Big Important Story

S$70,000 Child Support Package: How I'd choose between CPF top up and investing

Singapore’s new SG Child Support Package provides around S$70,000 per child. We look at how much is actually cash, whether to invest any excess or top up CPF, and what the money could grow to.

🤓 What we're looking out for next week

Key dates

• Monday, 31 Aug: Venture, CNMC Goldmine ex-dividend. 
• Tuesday, 1 Sep: iShares J.P. Morgan USD Asia Credit Bond Index ETF, iShares  USD Asia High Yield Bond ETF, Jardine Cycle & Carriage, Food Empire ex-dividend
• Wednesday, 2 Sep: Broadcom results
• Friday, 4 Sep: Soilbuild Construction ex-dividend 

Get the full list of stocks with upcoming earnings and upcoming dividends. 

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