LazyCat

STI is relatively weak at the time of writing this before lunch. There are only 5 stocks positive (ST Engg, YZJ ship building, HK Land, CDL, Keppel DC REIT). Took the red in financial in stride to add a bit to my YLD ETF position.

The dots in the 2027 plot are interesting as there were actually 3 members projecting rate cuts to 3.5%-3.75% and one projecting 3-3.25% (!) in 2027 while the rests opined target range to be either 4.00%-4.25% or 4.25%-4.5%. The accompanying SEP projected PCE inflation to fall from 3.7% at end 2026 to 2.3% by end 2027. Should this happen, the dot plots for the later years projected fed fund rates to move towards the mid 3% range by 2029. 🤔

This week feels like a game of high stakes poker , starting with the first weekend AI ghost story card, followed by no-go for clarity act card and now the market betting (pricing in) a near certainty of rate hike. Rate wise, a confirmation is not the key, but rather hints of what's ahead is needed to reduce market uncertainty.

The market reaction to the suggestion for deliberate "pacing" of AI frontier model developments shows that the broad AI trade is getting selective; the AI trade is still alive but those under immediate threat/scrutiny would be sold off first while the news is being processed. Right now, those with no negative catalysts, good cash flow, revenue generating platforms and security related themes are the safe harbours for the AI trade while the hardwares takes a hit for possible slowdown in capex buildup.

Am secretly enjoying the discounts for REITs unlike the past where rate hikes makes me nervous and unsettled. At the start of the year, many were wondering if the REIT boats would come back to port to pick them up. Are they still buying the ticket to board? For those onboard, are they still chilling on the ships' deck chairs or they are bailing out in their lifejackets, leaving their suitcases aboard?

The weakness shown by the STI is a reminder that the index is mainly driven by the 3 banks. When they sneezed, the index catches a cold.

while REIT prices are under tremendous pressure now, it presents an attractive level for accumulation, waiting for the rate cycle to reverse.

expect price to close at 151.43. The general sentiment for the global market is cautious and I believe most will want to de-risk and lock in a profit rather than risking another shock.

with the heating up of the middle east situation, elevated bond yields and inflation worries, the market looks to be derisking across the board.

I'm not so sure if the productiom of only hundreds of sets of the foldable iPhone is a fact or a rumour, given a seasoned consumer product corporate like Apple, would they consider the possible issues for launch?

It is no surprise that the STI would eased seeing that it's major constituents - the 3 big banks declined, probably due to profit taking and some risk off sentiments.