To The Moon

$Straits Times Index(STI.SI)$

The Feds have just increased interest rates today by 0.75%.  This is the 3rd straight interest rate increase as the Feds are adamant on quelling persistent high inflation which is  at 40 years high.  Subsequently after the announcement, all 3 US Indexes closed lower as there is Fear in the markets that rising interest rates would lead to recession. 

Our local bourse was certainly affected as the STI was trending downwards today.  However our 3 local banks were holding well.   Rising interest rates will have a positive impact on the Net Interest Income of the banks. 

Locally Singapore has also experienced high inflation too but nothing as high as the US.  

STI have been doing better than the S&P500.  In 1 year, our STI ETF has gained 9% compared to the S&P500 ETF which lost 20%.  That's because STI have 44% weightage in Banking stocks and the balance are Singapore Reits and property companies.  These are more value stocks.  The S&P500 top holdings comprise of Tech Giants like Apple, Microsoft and Alphabet.  These have not been performing too well lately. 

Higher CPI in the US has resulted in higher interest rates.  Subsequently US dollar has become King.  The Singapore dollar has weakened against the US Dollar.  

When the US sneezes, the world catches a cold.  So the current Bearish sentiments in the US have also affected our STI too. 

I am happy that the STI is holding up well to offset the weakness in the US markets. 

@MillionaireTiger