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Weekly Outlook

Weekly Outlook 18 Sep 2023 – 24 Sep 2023

Weekly Commentary: 18 Sep 2023 – 24 Sep 2023

Returns were mixed last week across the various indexes. CPI Index rose 0.6% in August from the prior month, with more than half of the increase due to higher gasoline prices. So-called core prices, which exclude volatile food and energy items, rose by a relatively mild 0.3% last month after even lower readings in June and July. The FED seems likely to hold interest rates steady at their meeting next week. Inflation is proving to be resilient as retail spending rose at the fastest pace since the start of the year. Retail sales rose at a seasonally adjusted 0.7% in July from the prior month. The retail sales gain was also higher than the 0.2% increase in consumer prices last month.

In China, economic activities appeared to improve as growth in retail sales rose to 4.6% from a year earlier, from just 2.5% in July, while unemployment ticked down marginally. Industrial production rose 4.5% in August yoy, gaining from the 3.7% increase in July. China has been trying to prop up the economy by cutting the reserve requirement ratio for banks by 0.25% to 7.4%, adding liquidity to the financial system. Big cities have also removed price restrictions on home purchases, including reducing minimum mortgage interest rates and down payments to boost the property sector. However, structural issues about the economy remain as youth unemployment remains an issue for them.

Stock returns were mixed over the week as observed across the following 3 indices, with the Dow Jones Industrial Average (+0.14%), S&P 500 Index (-0.12%), and NASDAQ Composite Index (-0.37%). Other notable key market indices that generated positive returns consist of MSCI World (+0.45%) & Hang Seng Index (+0.08%). All S&P 500 sectors registered mixed returns last week with notable sectors – Information Technology (-2.23%), Industrials (-0.59%), and Materials (-0.11%) falling more than the rest of the sector. For 2022, index returns were negative for the Dow Jones Industrial Average (-8.78%), S&P 500 (-19.44%), and the NASDAQ Composite (-33.10%).

The yield-curve remains inverted as the 10Y-2Y US Treasury spread tightened to -0.70%. driven by U.S 2-year and 10-year Treasury yields rising 3 bps to 5.03% and rising 7 bps to 4.33% respectively. Market sentiment also became more risk-off as the U.S. High Yield (HY) – Investment Grade (IG) credit spread widened 3 bps to 2.56% while the CBOE Volatility Index (VIX) fell 5 bps to 13.79%.

This coming week, The FED, BOE, and BOJ will announce its rate decision. China will also announce it’s policy rate decision and the UK’s August retail sales figures will be out.



The global REITs market’s return were mostly in the mix across the numerous benchmarks. Thailand Property Fund & REITs Index (-1.45%), Hang Seng REIT Index (-2.16%), and Tokyo Stock Exchange REIT Index (-1.31%) are the notable REITs that generated negative returns over the past week. Closer to home, the iEdge S-REIT Index (+0.69%) and most of its subsectors generated mixed weekly returns with Retail REITS (+1.84%) and Data Center REITs (+0.69%), the notable sector that outperformed the rest last week.  REITs generally have been affected by decreasing yield spread as interest rates surged and investors price in the possibility of reduced distributions stemming from higher financing costs. However, we do expect inflows to return to the sector given the existing attractive valuations on offer and resilience offered by the REIT asset class in light of the waning global growth outlook.


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