LazyCat

UOB appears to be given a reprive from relative negative sentiments and led the 3 banks as of 2:30pm. Overall the "higher for longer" narrative is blowing gently as a constructive trade tailwind as of now.

$Lion-OSPL APAC Fin S(YLD.SG)

context: Following the 25bps fed rate hike with a penned probability of another later this year, the negativity towards the NIM compression of the local bank improved. While this will not have an immediate effect on their balance sheet, the news strengthen the generally positive sentiments towards them.

My Trade: I have taken the opportunity of the recent weakness to add to my YLD position, which is the barbell counter to my REIT holdings (which I have added some recently)

Takeaway: It is important to hedge my interest rate sensitive holdings and manage their position sizes.

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.

A "bombshell" just dropped as Anthropic CEO Dario Amodei, backed by leaders like Sam Altman and Elon Musk, called for the deliberate slowdown ("pacing" but not halting) in launching next-generation frontier AI models. This is supposed to give safety testing, evaluation frameworks, and alignment research enough time to keep pace as AI systems move toward autonomous capability thresholds.

As chipmakers serve as the primary proxy bet on AI expansion, the call to "pump the brakes" created an immediate sentiment and valuation shock:

* Sell-Off & Support Levels: $NVIDIA(NVDA.US) shares experienced an immediate pullback of ~3.5% to 8%, testing near-term support levels around $210–$212.

* Capex Growth Expectations: Nvidia’s valuation relies heavily on cloud hyperscalers (Microsoft, Meta, Google, Amazon) making continuous multi-billion-dollar investments in GPU clusters. "Pacing" means slower model iterations, signalling potential delays or moderation in near-term hardware orders.

But I think this is an expectations recalibration rather than a fundamental demand collapse, since enterprise inference workloads and current model deployments should still remain active.

As such, I'm holding on to my $NVIDIA(NVDA.US)shares and will add when it hits by accumulation level.

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?

REIT prices are under tremendous pressure with the rise in the bond yields, coupling with the backdrop of the worsening middle east situation and the rise of oil prices. The risk premium for REITs has risen significantly and it is a good time to bargain hunt for long term investors.

I have added 2 lots of $Frasers Cpt Tr(J69U.SG)on Friday and am looking for more opportunities for steeper discounts ahead (if any). I believe the rate hike for Sep has already been priced in and subsequent opportunities would be tied to sudden market shocks and the next anticipated rate hike at the later part of the year.

Bottomline is to add in tranches at predetermined levels.

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?