πππWhat a rollercoaster 2025 has been! It started with a bang - a gut wrenching dip in April due to Trump's Tariffs, only for US equities to perform the most spectacular rebound in history. It wasn't just a Bull market. It was a beast unleashed.
The Global Carnage and the AI Paradox
We watched history unfold in real time as Gold finally breached the mythical USD 4,000 mark for the first time ever. Meanwhile $NVIDIA(NVDA)$
Surviving the Witches and the BoJ
Just as we reached the finish line, we had to navigate the "December Hex" - the largest Quadruple Witching in history with USD 7.1 trillion in options expiring. This collided with a rare Bank of Japan interest rate hike that many feared would tank global liquidity.
But the BoJ move proved to be more of a "yawn" than a "scream" as the rate hike was fully priced in and the market laughed in the face of the witches. Instead of a crash, we witnessed a massive Gamma Squeeze that sent the S&P500 soaring past 6,800. The mechanical "pinning" by the big institutions failed and the bears were left out in the cold.
The Singapore Anchor: DBS and OCBC Lead The Charge
While the US market whipsawed investors, the STI ETF $STI ETF(ES3.SI)$
Our local champions $DBS(D05.SI)$
These 2 banks lead the charge due to Singapore's stable economic environment and robust loan growth, especially from corporate lending and domestic mortgages.
While net interest margins faced pressure from falling global rates, the banks successfully diversified their income streams, achieving record wealth management fees and strong trading income. This powerful combination of resilient earnings, attractive dividends and Singapore's safe haven status attracted significant capital inflows from global fund managers seeking stability, which collectively propelled the STI to its record highs.
What to Expect in 2026: More Growth but New Risks
After the drama of 2025, analysts are cautiously optimistic for the new year. But volatility may be the name of the game.
S&P500 Targets: Despite fears of an AI bubble, Wall Street remains largely bullish. Firms like Goldman Sachs and Morgan Stanley are setting S&P500 price targets for end 2026 between 7,600 and 7,800.
AI Dominance to Continue: The AI theme isn't over. Experts believe that we are still in the early stages with massive enterprise AI adoption expected to drive another 20% rise in tech stocks. The key risk is whether the strong growth can meet the lofty valuations.
Gold on the Move: Analysts project gold prices will continue their ascent, potentially pushing toward the USD 5,000 per ounce by the end of 2026, driven by ongoing central bank demand and a weaker US dollar.
Singapore Moderation: DBS economists expect Singapore's GDP growth to moderate slightly after its strong 2025 showing. However the STI still offers an attractive dividend yield and remains a very attractive investment destination. DBS is targeting an end 2026 STI level of 4,880. The main risks are trade tariffs and a potential global slowdown.
Santa is Coming To Town
After being caught in the storm of the BoJ and Options expiration, the Santa Claus Rally has officially arrived. The decks are cleared , the "jinx" is broken and the path of least resistance is up.
2025 has taught us that while the US provides the fireworks, true, durable wealth is built on the solid ground we walk right here in Singapore. It is time to stop staring at the charts and start focusing on what matters - Peace, Gratitude and a safe country to call home.
The Verdict
We survived the volatility, the witches and the hikes. Santa is here to spread good cheer, peace and blessings to all who believe in the magic of Christmas.
May the peace of Christmas dwell in your hearts, the love and warmth of family fill your homes and the promise of a brighter New Year guide your way.π₯°π₯°π₯°π π π ππππ°π°π°
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