Market Overview

Singapore

Straits Times Index (STI) is a market capitalisation weighted index that tracks the performance of the top 30 companies listed on SGX.

With no signs of Singapore’s CPI cooling, the STI had perform as expected from the weak data, underperforming as compared to the US Market

It had also been a challenging year for Singapore REITs as higher interest rates would lead to higher borrowing costs, lower property valuation and potentially lower distributions for REITs, making them a less attractive asset class as compared other assets with higher yields such as fixed income and cash deposits.

However, along with expectations that interest rates have peaked, the REITs sector saw one of its best months in three years in November, gaining 7.4% in total returns.

Price has rebounded from the key support level of 3,038-3,040 in Nov and rallied towards 3180. However, sellers return and price back toward the support level as the index continues to lag behind.

Potentially would be able to see upside toward the 3,250 resistance if the index is able to hold above the 3,150 level.

Still seeing generally weakness in the SG market for now as 20d MA is still below 100d and 200d with no reversal confirmation yet.

Hot News (Click to read):

• Singapore exports up 1% in November after 13 months in the red (The Business Times)

• Singapore economy expected to grow by 1.8% y-o-y in 4Q2023: MAS survey (The Edge)

United States

After 11 rate hikes over 2022 and 2023, we have seen the Fed funds rate been pushed to the highest level in more than 22 years, with how ambitious was the Feds on combating inflation.

A softer landing than expected was seen in the markets with the S&P500 and Dow Jones reaching record highs in 2023 after the release of the decision that the Fed had kept rates steady for the third time straight and likely to cut interest rates multiple times in the year ahead.

Dow Jones Industrial Average (DJIA) tracks the daily price movements of 30 large, public-owned blue-chip American companies, after breaching the 36,800-37,000 level, prices rallied and momentum was seen in the market. Expecting some selling pressure to show up when prices approach the 38,000 psychological level.

S&P 500 Index is a market-capitalization weighted index of the500 leading companies in the US which is widely considered as one of the best gauge of the US economy.

Currently trading above the 4,600 key support level, indicators have shown that prices have recovered from the downtrend previously and is currently in a long term uptrend with the key resistance level around 4800 which was the previous high in the Jan 22.

However, one should take caution as prices could be sent higher by sentiments and over optimism and euphoria.

Hot News (Click to read):

• Fed lowers inflation forecast for 2024, seeing core PCE falling to 2.4% (CNBC)

• Retail sales rose 0.3% in November vs. expectations for a decline (CNBC)

OUR TOP FAVOURITE STOCK FOR SG MARKET

KEPPEL CORP (BN4.SI)
Target Price: S$7.50

About Keppel Corporation

• Keppel Corp. Ltd engages in the provision of offshore and marine engineering and construction services

• It operates through the following segments: Energy and Environment, Urban Development, Connectivity, Asset Management, and Corporate and Others

Fundamental

• 3Q23 revenue fell 6.0% YoY, dragged lower by weak property sales in China and India, after the rebound in 1H.

• 3Q23 net profit was higher YoY, 3Q23 Infrastructure revenue grew1.3% YoY, in spite of a volatile gas price and the implementation of temporary price control measures

• Fuel input costs are hedged, and costs are passed through, including the higher carbon taxes in 2024

• Asset monetisation is expected to pick up from 4Q.

Technical

• Overall long term uptrend is still intact as price is trading above all 3 MA. 20d MA has also recently broke above the 100d MA

• Key support to note around 6.20 where it has been tested multiple times since April 2023

• Immediate psychological resistance is around 7.00 where selling pressure could return first as indicated by the long upper shadows seen over the past weeks candlesticks

OUR TOP FAVOURITE STOCK FOR US MARKET

NVIDIA CORP (NVDA.NQ)
Target Price: US$600.00

About Nvidia Corp

• NVIDIA Corp. engages in the design and manufacture of computer graphics processors, chipsets and related multimedia software

• Operating through the following segments; Graphics Processing Unit(GPU), Tegra Processors

Fundamental

• Strong fiscal third quarter results for the period ending October 29 that revealed tremendous momentum behind the revolution in AI

• Revenue saw a three-fold increase from the same period a year ago, driven by the strength of its Data Center business.

• However, there is uncertainty in the AI spending binge's duration and the evolving competitive environment with companies like Advanced Micro Devices (AMD)

Technical

• Key psychological support level around 400 still remains as price has rebounded from the level multiple times since Jun

• A morning star pattern appeared on 30 Oct - 1 Nov adding further weight to the support level (Morning star is a bullish reversal pattern)

• Immediate resistance still remains at 500 where bears are still in control for now until the level is breached

• Potential upside target towards 600 if price can hold above 500

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