Weekly recap: Stocks and REITs rally after Fed holds rates steady

Global stocks bounced sharply this week, after investors gained confidence from the latest Fed meeting that it might be done with rate hikes. 

On the flip side, US government bond yields fell after the latest Fed interest rate decision. 

The good news is that banks have continued to raise their fixed deposit rates in the meantime, with the best 3-month fixed deposit rate now at 3.58% per annum. 

For investors interested in locking in the current high interest rates for a longer term, we find out if the latest SSB which offers a 10-year average return of 3.4% is worth buying compared to T-bills.

✅  THE FED MAY BE DONE WITH RATE HIKES

What happened? 

The US Federal Reserve (Fed) has kept its benchmark interest rate unchanged in its latest meeting. 

At the same time, investors gained confidence that the Fed might be done with raising interest rates. 

What does this mean?

The Fed is proceeding carefully as longer-term bond yields have increased significantly. 

For example, the 10-year US government bond yield exceeded 5.0% recently, the highest level since 2007.

As a result, the economy may slow significantly without requiring the Fed to raise its benchmark interest rate further. 

Why should I care? 

Global stocks rallied with growing expectations that the Fed could be at the end of its hiking cycle.

We find out what the latest Fed meeting means for your investments here. 

💡 THE BIG IMPORTANT STORY

Here’s why Frasers Centrepoint Trust has been more resilient than other REITs

Frasers Centrepoint Trust's share price has been stable so far this year despite a broad sell-off in Singapore REITs. We find out why investors are buying into this retail REIT.

🚗 WHAT'S MOVING

• CapitaLand Ascendas REIT’s portfolio occupancy has remained stable at 94.5% in the third quarter, compared to 94.4% in the previous quarter. The average portfolio rent reversion of leases renewed in the third quarter was 10.2%. 
• Digital Core REIT announced that it has reached a definitive agreement to sell several Silicon Valley facilities for US$160 million to Brookfield Infrastructure Partners, under a series of agreements to resolve the bankruptcy of its second largest customer.
• SingPost reported earnings of S$11.5 million in its 1HFY2024 ending September, turning around from a loss in the previous year. The reversal to profitability was attributed to the group’s Australian logistics business and international cross-border business.
• Keppel Infrastructure Trust’s (KIT) distributable income rose to S$266 million in the first nine months of 2023, a 93% increase compared to the previous year. KIT will pay out a special distribution of 2.33 cents per unit, which will bring its total distributions to 5.23 cents for the first nine months of 2023. 
• Apple reported its fourth straight revenue decline, driven by a sluggish computer market and a slowdown in China. In addition, the company expects revenue in the current quarter to be about the same as last year, signalling that there may not be a growth rebound in the near term.

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

🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK

• Monday, 6 Nov: DBS earnings
• Tuesday, 7 Nov: SIA, Lendlease REIT earnings
• Wednesday, 8 Nov: 6-month Singapore T-bill auction, United SG Dynamic Income Fund Webinar
• Thursday, 9 Nov: Singtel, CapitaLand Investment earnings
• Friday, 10 Nov: OCBC, SATS earnings

Source: Bloomberg, SGX 

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