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Top Stock Market Highlights of the Week: US Interest Rates, Apple and Guocoland

Welcome to this week’s edition of top stock market highlights.

US interest rates

Investors who were hoping for a reprieve from the current high interest rate environment will be disappointed.

The US Federal Reserve (“Fed”) chairman Jerome Powell has signalled that a longer wait is necessary before interest rates can be cut.

This pronouncement came on the heels of higher-than-expected inflation readings in the first three months of this year.

The goal of the central bank is to bring inflation down to the more palatable 2% level.

Should price pressures persist, Powell said that the Fed can keep rates steady for “as long as needed”.

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This language implies that the US central bank is in no hurry to reduce interest rates as long as inflation remains elevated.

Policymakers were projecting up to three interest rate reductions this year but investors are now assuming that there will be just one or two cuts.

Treasury yields hit fresh 2024 highs with the two-year note briefly exceeding 5%, its highest level since November 2023.

Mortgage rates also surpassed 7%, hitting 7.1% for the first time this year.

The US economy continues to stun officials with its resilience as employers added 300,000 jobs in March, the most in almost a year, while retail sales exceeded expectations.

With this latest news, it seems that interest rates may be staying higher for longer until inflation starts to meaningfully fall towards the 2%-mark.

Apple (NASDAQ: AAPL)

Apple has announced its intention to invest over US$250 million to expand its Ang Mo Kio campus in Singapore.

The upgrade will comprise two buildings that were acquired in 2022 and which sit next to its offices.

Construction is slated to begin this year.

Apple first opened a facility in Singapore back in 1981 with just 72 employees.

Its staff strength here has now grown to more than 3,600 and according to Apple, it supports more than 60,000 jobs through direct employment, its supply chain, and through its iOS app economy.

The technology company has upgraded its facilities and laboratories over the past decade, including increasing the space at its hardware technologies centre by 50% since 2019.

Apple currently has three store locations in Singapore – Orchard Road, Jewel Changi Airport, and Marina Bay Sands.

And like all its facilities, the expanded campus will run completely on renewable energy.

GuocoLand Limited (SGX: F17)

GuocoLand announced that its joint venture tender with Intrepid Investments for a land parcel at Upper Thomson Road has been accepted by the Urban Redevelopment Authority (URA).

The bid price was S$779.5 million.

This piece of land is located close to Springleaf MRT station which is along the Thomson-East Coast MRT line.

GuocoLand will own a 60% stake in the land parcel with Intrepid holding the remaining 40%.

Intrepid is a wholly-owned subsidiary of privately-held Hong Leong Holdings.

The site area is around 32,023 square metres and has a tenure of 99 years.

GuocoLand reported a commendable set of financial results for the first half of fiscal 2024 (1H FY2024) ending 31 December 2023.

Revenue surged by 61% year on year to S$1.1 billion with Singapore making up 80% of the group’s revenue.

Operating profit excluding fair value gains/losses and exceptional items climbed 42% year on year to S$93.1 million.

The property giant’s net profit for 1H FY2024 increased by 12% year on year to S$66.2 million.

The better results came from GuocoLand’s Singapore income-generating assets Guoco Tower and Guoco Midtown with the latter securing a 92% pre-commitment take-up for 709,000 square feet of net lettable area.

The group also secured reputable office tenants within Guoco Midtown such as chemical company BASF (ETR: BAS), NetEase Interactive Entertainment (HKSE: 9999), and Suntory Beverage & Food (TYO: 2587).

20 Collyer Quay, the group’s other commercial development in Singapore, also maintained a high occupancy rate of 98%.

For China, the South Tower of Guoco Changfeng City in Shanghai boasted a high committed occupancy rate of 95% for its Grade A office spaces as of 31 December 2023.

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Disclosure: Royston Yang owns shares of Apple.

The post Top Stock Market Highlights of the Week: US Interest Rates, Apple and Guocoland appeared first on The Smart Investor.