Stocks soar and T-bill yield rebounds: Weekly Market Recap

Donald Trump looks set to return to the White House next year. 

Whether or not this comes as a surprise, stock investors seem optimistic about what it might mean for the market.

Exuberance is in the air, with the S&P 500 and Singapore bank shares hitting record highs. I mentioned to a friend that this is the first time I recall seeing UOB's shares jump by 10% in a single day. 

In addition to strong earnings, DBS announced a $3 billion share buyback programme, while UOB suggested potential dividend hikes or buybacks.

On the flip side, Singapore REITs took a hit amid concerns over high bond yields. We dive into the factors contributing to REITs' recent weakness.

Amid this upbeat market sentiment, you might have missed the cut-off yield of 3.04% in the latest 6-month T-bill auction. Although slightly up from the previous auction, it has declined significantly from past highs. If you're seeking alternatives to the T-bill for a better yield, we explore some options to consider.

A recent media commentary remarked, “we have been here before.” While it’s easy to get caught up in today’s optimism, it’s wise to stick to the basics: always know your investment goals, be mindful of risks, and stay diversified.

Happy growing!

Gerald, Founder of Beansprout

⏰ This Week In Markets

🚀 All-time high

What happened? 

Donald Trump has been elected as the 47th President of the United States, securing more than 270 electoral votes in the presidential election. 

The Republicans also gained control of the Senate, raising the possibility of a ‘red sweep’ if they win control of the House of Representatives as well.

What does this mean?

If Republicans were to control the White House and both houses of Congress, Trump would likely find it easier to implement his economic agenda. 

Many of his proposed policies aim to stimulate growth but could also heighten inflation risks. 

For instance, he has pledged to retain a prior tax cut and has suggested additional individual and corporate tax reductions.

Why should I care? 

US stocks rallied after the elections, with the S&P 500 hitting an all-time high above 6,000 points before ending just below that level on Friday. 

Tesla shares jumped, boosted by Elon Musk’s involvement in Trump’s campaign, and the small-cap Russell 2000 surged 8% this week. 

However, bond yields climbed due to inflation concerns linked to Trump’s policies.

In Singapore, the STI rose above 3,700 points on strong earnings from DBS and UOB and expectations that a slower pace of Fed rate cuts could support bank earnings. 

Meanwhile, Singapore REITs declined as higher bond yields weighed on the sector. Read more in our REIT Weekly Watch.

🚗  Moving This Week

• DBS 3Q24 net profit rose 17% year-on-year to S$3.0bn, and 9% higher than 2Q24, led by higher fee income, markets trading income and lower credit allowance. It declared dividend of 54 cents/share, and announced a S$3bn share buyback programme. Read our analysis of DBS earnings here.
• UOB 3Q24 net profit rose 10% quarter-on-quarter to S$1.61bn, with a 63% surge in non-interest income due to record customer flow treasury income and trading gains. Read our analysis of UOB earnings here.
• OCBC 3Q24 net profit rose 2% quarter-on-quarter to S$1.97bn, led by higher fee and trading income. Net interest margin fell 2bp to 2.18%, while DBS and UOB’s were flat over 2Q24.  Read more here.
• Capitaland Investment 9M24 revenue rose 0.9% year-on-year to S$2.1bn. While fee-income related revenue rose 6% to S$845m, real estate investment business fell 2% to S$1.4bn.
• Genting Singapore 3Q24 net profit fell 63% year-on-year to S$79.4m, due to lower VIP rolling volume and win rate. Read more here. 

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 The big important story

What's driving weakness in Singapore REITs?

The share prices of Singapore REITs have fallen in recent weeks. We find out how higher government bond yields and mixed sector fundamentals have impacted Singapore REITs.

🤓 What we're looking out for next week

• Monday, 11 Nov: Lendlease Global Commercial REIT earnings
• Tuesday, 12 Nov: Frasers Hospitality Trust earnings, SGX Academy webinar: Unlock the potential of Hong Kong tech stocks with SDRs
• Wednesday, 13 Nov: Starhub and Singtel earnings
• Thursday, 14 Nov: DBS ex-dividend date
• Friday, 15 Nov: Alibaba earnings

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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