Welcome back to our Weekly Market Wrap-up, your go-to source for the latest financial insights and market happenings.

Our Weekly Market Monitor provides topical commentary on the financial markets, highlighting a chart of the week and upcoming key economic events, in addition to a review of performance across asset classes and sectors.

Here are the money movements that you should pay attention

Fed Rate Cut Expectation and Stock Market Rally

Market optimism is high, assuming the Federal Reserve has concluded its aggressive interest rate hikes, leading to a surge in stock and bond markets. However, it’s crucial to note that this isn’t definitive. There’s also the chance that, even without further hikes, rates could remain elevated for an extended period.

My Opinion: Based on derivative market data shown below, the market has zero expectations of a December Fed rate increase. This poses a potential danger. If the Fed changes its tone in December, the market could experience significant disappointment and turbulence. This underscores the importance of preparing for diverse outcomes despite market optimism.

Bitcoin Rally and ETF Filing

The crypto market has recently rebounded, with Bitcoin doubling in value, now exceeding $37K. This resurgence is attributed to dovish Federal Reserve expectations, which we just talked about, and the anticipation surrounding BlackRock’s Bitcoin and Ethereum ETF filing. Despite SEC postponements on spot Bitcoin ETF applications by Global X and Franklin Templeton, spirits remain high in the crypto market.

My Opinion: The crypto market serves as a barometer of the market’s risk preference. While I maintain a neutral stance on crypto as an investment now, the movement provides insight into market sentiment. With an imbalance in demand and supply for risky assets, coupled with funds stuck in short-term yielding instruments like T-Bills and US treasuries, an improvement in sentiment could result in significant movements in risky assets.

Certificate of Entitlement (COE) Developments

Singapore’s Certificate of Entitlement (COE) has been a hot topic recently. The COE quota for November 2023 to January 2024 has increased, leading to a drop in COE premiums. The latest CAT B bidding dropped to $110K, $40K cheaper than the previous round.

My Opinion: COE movements reflect the financial market’s volatility. It’s a reminder that, at one moment, you could be at the summit, and the next, everything could collapse due to a single movement. I ponder the feelings of those who secured a COE in the previous bidding at $150K. It reminds us to maintain a cool head when making financial decisions. The market always moves by expectations. I personally feel that the COE price has more room to go down further.

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About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

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