That was really the story behind Tuesdayโs softer markets across Asia.
The US 10-year Treasury yield briefly touched its highest level since 2007. Oil is also still above US$100, with the Middle East situation keeping investors on their toes.
So you have two things happening at the same time.
Bond yields are high, which means investors now have a pretty decent alternative to stocks. And when yields keep going up, stocks trading at higher valuations naturally come under more pressure.
Then you have oil.
If oil stays above US$100 for too long, inflation becomes harder to ignore. And if inflation stays sticky, interest rates may have to stay high for longer too.
Not exactly the best combination for stocks. ๐
You could see that mood across Asia on Tuesday. It wasnโt just Singapore.
In fact, our market held up relatively better. The STI slipped 0.25%, with the local banks providing some support.
So while we look at what is happening to individual stocks, sometimes it pays to zoom out a little.
For now, keep one eye on that US 10-year yield.
Above 5%, bonds are no longer something stock investors can just ignore.
Sometimes the market doesnโt need a new crisis.
A higher risk-free rate is already enough to change the conversation.
Thanks to Senior Business News Correspondent Lewis Ong (ๆฉๆฅ่ดข็ปๆฐ้ป่ตๆทฑ้ซ็บง่ฎฐ่ ็้ณๅ) from Lianhe Zaobao for the opportunity to share some thoughts on the markets. ๐
https://www.zaobao.com.sg/finance/singapore/story20260929-9755960
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