One Good, One Bad, One Steady

THIS WEEK IN MARKETS

There were three key developments that moved the markets in the past week.

In the US, the Fed raised interest rates by 0.75 percentage point (0.75%) as expected, and signaled that we might see higher peak interest rates.

In China, the market rallied with growing investor speculation that there might be a reversal of the country’s zero-covid policy.

In Singapore, the stronger than expected earnings reported by many companies including the banks led to bounce in the STI. 

Investors will continue to read the tea leaves in the coming week to determine if China’s re-opening will finally happen. 

There's also an upcoming auction of the 6-month T-bill on 10 November that many are keeping a lookout for!  

IMPORTANT

• Very premature. The Federal Reserve isn’t appearing to be changing course on its tightening for now. Jerome Powell took effort to drive in this message by saying that “It is very premature to be thinking talk about pausing…very premature.” Read our analysis here. 
• Re-opening cheer. Chinese stocks listed in Hong Kong saw the greatest weekly gain since 2015 with widespread speculation that China may reverse its Covid Zero policy. This was driven by unverified online posts about its potential opening, as well as a Bloomberg report that China is preparing to scrap a “circuit breaker” system that suspends international flights that ferried the most infected passengers. 

ICYMI

• Uber (UBER) reported better-than-expected quarterly revenue as there was a sharp increase in gross booking compared to the previous year. 
• PayPal (PYPL) lowered its annual revenue growth forecast and expressed caution about the impact of an economic slowdown. 
• DBS Group Holdings reported record high quarterly earnings of $2.24 billion in 3Q22, supported by higher net interest margin. 
• Capitaland Ascendas REIT reported positive rental reversion of 5.4% in 3Q22 and an increase in portfolio occupancy to 94.5% from 94.0% in June 2022. 
• Wilmar reported a net profit of US$766 million in 3Q22, an increase of 35% from a year ago. The company noted that the prices of consumer products were adjusted upwards while raw material prices started to decline. 
• Raffles Medical Group reported a profit after tax of S$38.3 million in 3Q22, an increase of 62% from a year ago. Earnings were supported by the return of foreign patients seeking treatment, and domestic patients returning for elective treatments. 
• OCBC raised interest rates on the OCBC 360 savings account to up to 7.65% per annum. Read our analysis here
• Singapore Savings Bond (SSB) is offering an all-time high first-year and 10-year average return of 3.26% and 3.47% respectively for the December tranche. Read our analysis here.

Source: Bloomberg, CNBC, Business Times, Edge Singapore

THE BIG IMPORTANT STORY

Should you sell your T-bill and SSB to put into the OCBC 360 account? A lesson on re-investment risk.

Apart from comparing interest rates, we can also look at the time period of the investment when assessing different options in the market.

WHAT’S UP THIS WEEK

Monday, 7 Nov

• US: Palantir earnings
• SG: Lendlease Global Commercial REIT earnings

Tuesday, 8 Nov

• US: AMC entertainment, Occidental Petroleum earnings
• SG: First REIT, Prime US REIT earnings

Wednesday, 9 Nov

• SG: EC World REIT, SATS, Starhub earnings

Thursday, 10 Nov 

• US: NIO earnings, CPI data
• SG: Frasers Logistics & Commercial Trust, Singtel earnings

Friday, 11 Nov 

• SG: Fraser Property earnings

Source: SGX, Bloomberg, Refinitiv

THAT’S INTERESTING

• It's a goal! This year’s FIFA World Cup matches will be available to football fans in Singapore live or on-demand for at least S$98. Mediacorp, Starhub and Singtel will provide coverage of all 64 games across platforms. Nine games, including the final, will be available for free. This year’s tournament will take place in Qatar from 20 November to 18 December. (Source: Channelnewsasia)