Stocks slide on trade war escalation: Weekly Market Recap

Like many of you, I was keeping an eye on what would emerge from US President Donald Trump’s much-anticipated ‘Liberation Day’ tariff announcement.

But I have to admit—even with his reputation for surprises, the sweeping tariffs caught many off guard.

I shared with a friend: Imagine spending years building a “China + 1” manufacturing strategy, only to find out Vietnam now faces a 46% tariff too. That’s almost as steep as China’s 54%. Not surprisingly, the European Commission President called it a “major blow to the world economy.”

So what now? That’s the question many of us are asking. 

If you're looking for a safe place to park your cash, finding a decent yield is more challenging now. UOB and OCBC have announced cuts to their savings account rates starting 1 May, and fixed deposit rates continue to slide. The upcoming T-bill auction on 10 April might also see yields fall further as global bond yields dip.

With falling interest rates, I have received many questions about asset classes like bond funds and REITs that typically benefit. 

This week, we take a closer look at the PIMCO Income Fund, one of the largest bond funds globally. We also share our latest outlook for Singapore REITs.

Here are 3 things I’m doing to navigate this volatile period:

• Understand my goals: I remind myself I’m investing for the long term. A short-term dip shouldn’t throw me off track if I’m focused on retirement more than 10 years down the road.
• Staying diversified: I’m not putting all my eggs in one basket. Spreading across asset classes and geographies helps cushion the impact of surprises.
• Keeping informed, not overwhelmed: I’ve found that the more I understand, the more confident I feel. So I always turn to research, not emotions, to guide my investing decisions.

If you’re feeling unsure in this market, you’re not alone. I’d love to hear your thoughts or questions as we learn and grow together.

Gerald, Founder of Beansprout

⏰ This Week In Markets

🏛 Sweeping tariffs drive global recession concerns 

What happened? 

Global trade tensions are back in focus, after US President Donald Trump announced a sharp hike in import tariffs.

From 5 April, a baseline 10% tariff will be applied to imports from all countries. A second round of higher tariffs will follow on 9 April, targeting countries deemed to have “excessive” trade barriers.

China will face a total tariff of 54%, including a new 34% levy on top of the existing 20%.

In response, China has announced that it will impose a 34% tariff on American goods, in addition to its existing duties. This countermeasure will be implemented from 10 April, according to the State Council.

What does this mean?

The sweeping tariffs mark a significant escalation in trade tensions between the US and its global partners.

US Federal Reserve Chairman Jerome Powell noted that the tariffs are likely to put upward pressure on inflation while dampening economic growth.

Following these developments, several banks have lowered their forecasts for US economic growth and increased the probability of a recession in the months ahead.

Why should I care? 

The S&P 500 experienced its steepest two-day drop since the COVID-19 pandemic in March 2020, as growing tariff uncertainty stoked fears of a potential global recession.

In a flight to safety, bond yields fell sharply while gold prices surged.

Singapore stocks fell by a smaller extent with investors seeking refuge in perceived safe haven markets. The share prices of Singapore REITs were also resilient, supported by the decline in bond yields.

Read here to find out what Trump’s tariffs mean for your investments 

🚗  Moving This Week

• The manager of Stoneweg European REIT has proposed to convert the REIT into a stapled trust comprising a REIT and a business trust. According to the REIT manager, the proposed stapling will provide the REIT with a future-proof corporate structure with optimal tax efficiency. The stapled structure will also lower reliance on passive rental income and make it more resilient to market cycles. Read our analysis here.
• Keppel Infrastructure Trust will be acquiring about 46.7% stake in Global Marine Group (GMG), a leading subsea cable solutions provider for about US$90.6 million from Keppel Infrastructure Fund (KIF). Following the acquisition, the remaining 53.3% interest will be held by KIF and its co-investor. Read our analysis here.
• Yangzijiang Financial has raised net cash proceeds of S$139.3 million through a placement of its entire treasury shareholding of 193.5 million shares at S$0.72 apiece. The proceeds will be redeployed for maritime investments. Read more here.
• Grab has been issued a street-hail service operator licence by the Land Transport Authority (LTA). LTA said the licence is valid for 10 years from Apr 9, and was awarded to GrabCab, a subsidiary of Grab Rentals and sister company of GrabCar.

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 The Big Important Story

T-bill yields are falling. Time to look at Singapore REITs?

Falling T-bill yields and rising concerns of a global recession have led to renewed interest in Singapore REITs. We find out if they are a safe place to ride out market volatility.

🤓 What we're looking out for next week

• Monday, 7 April: DBS ex-dividend
• Thursday, 10 April: US Consumer Price Index (CPI) data, 6-month Singapore T-bill auction
• Friday, 11 April: US University of Michigan consumer sentiment data, JPMorgan, Morgan Stanley, Blackrock earnings

Get the full list of stocks with upcoming dividends here. 

Source: SGX, Bloomberg, Refinitiv

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