Daily Morning Note – 28 May 2018
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ETF Model Portfolio – April 2018
Analyst: Pei Sai Teng
– 10-yr treasury yield crossed above the Rubicon 3% level
– Geo-political tension remain high as US-China trade negotiating continues to
hog headline news.
– Kim-Trump summit remains an uncertainty.
– Oil broke up higher on new sanction on Iran and possible sanction on the new
U.S. West Texas Intermediate (WTI) crude futures fell $2.83, or 4 percent on Friday after several headlines suggested OPEC and non-OPEC members could increase supply. This is WTI crude’s worst day since July 2017; oil is off more than 7 percent from recent highs above $72.
The rate on the benchmark 10-year Treasury note has fallen roughly 15 basis points since last Monday; it was last seen at 2.93 percent. The Fed’s May meeting minutes last week showed the central bank may be willing to let inflation run a little hotter than its 2% goal. Importantly, this week’s movement brings the 10-year yield below our technical threshold of 3%, which we believe could signify the end of the 35-year bull market for bonds.
American and North Korean officials met at the border between North and South Korea on Sunday in preparation for a possible North Korea-U.S. summit. US president Donald Trump has said the June 12 summit in Singapore “could” still happen.
US Markets will be closed Monday for the Memorial Day holiday.
ComfortDelgro Corp. Ltd. (CDG) and Uber Technologies have agreed to dissolve the strategic agreement that they entered into last December. As a result, CDG will no longer be acquiring the 51-percent-stake in Uber’s wholly-owned car rental subsidiary Lion City Holdings Pte Ltd.
Source: SGX Masnet, Bloomberg, Channel NewsAsia, Reuters, The Business Times, PSR
Clients of Phillip Securities can keep updated with Country Strategy and Singapore Sector Reports by logging into: www.poems.com.sg > STOCKS > Research
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