Weekly Market Insights: Is Fed Going to Raise Rate This Week?

In a relatively calm Friday session, US equities continued their upward climb, with investors eagerly awaiting the release of CPI data and the upcoming Fed’s FOMC meeting. The S&P 500 inched up by 0.1%, reaching 4,299, while the Nasdaq 100 gained 0.3%, closing at 14,528. Once again, the spotlight was on mega-cap tech stocks, while the Russell 2000 took a step back with a 0.8% decline. Among the S&P 500 sectors, information technology and consumer discretionary stood out as top performers, while materials, utilities, and energy struggled to keep pace.

What you need to know

This week, the market is eyeing on whether Fed will leave policy unchanged at the June meeting on June 15, taking perhaps a pause to the aggressive interest rate hiking cycle previously.

Tesla received a significant boost of 4.1% following General Motors’ announcement of joining Tesla’s charging network, underscoring the increasing importance of electric vehicle infrastructure. Adobe and Advanced Micro Devices also experienced gains of over 3% as investors continued to show interest in companies poised to benefit from the AI frenzy. Netflix saw a 2.6% increase after reports revealed its successful efforts in curbing password sharing, resulting in a surge of new subscribers.

What is happening in Singapore

DBS highlighted the impact of its digital capabilities and the flight to safety, particularly during the Covid-19 pandemic, as deposits soared. This liquidity surplus further demonstrated how Singapore has become a favored destination for Asia’s wealthy individuals seeking a safe haven for their wealth, even as local customers took advantage of high interest rates on fixed deposits. However, local lenders have signaled a more cautious outlook for loan growth, reflecting the prevailing global economic uncertainty.

Mapletree Industrial Trust made an announcement that its third-largest tenant, accounting for 3.2% of gross rental income, had filed for bankruptcy. This news had a negative impact, particularly in a “growth” sector like data centers. However, its diversified portfolio and tenant base should help mitigate the overall impact of this development.