Well – what a week!
For those of you following crypto or US markets (or even China), you’ll know that price action has been really interesting of late.
To sum up.
Singapore stocks have been pretty much muted.
Crypto and US stocks have been pretty terrible.
While China has been pretty amazing.
It’s been quite a while since I’ve done a proper macro piece, so I figured this was as good a time as any to resurvey the macro landscape, and share my views on how I would position my personal portfolio.
This is an FH Premium post that I am making available to all readers.
If you find content like this helpful, do consider subscribing for FH Premium.
You will also get access to my latest macro views, full stock / REIT watchlist, and personal portfolio (updated weekly).
Surveying the price action in markets – Singapore, US, China, Crypto
Singapore Markets – Muted, but interesting under the surface
Let’s start with Singapore.
Generally speaking the STI is holding up pretty well – supported mainly by the strong price action from the Singapore banks and other big dividend players (eg. names like ST Engineering, Keppel, Singtel have been doing decent in 2025 so far).
But look under the surface, and REITs in particular have been doing terrible.
The Lion-Phillip S-REIT ETF as a whole is even lower than 2024 lows at this point.
Personally I see opportunity in REITs at these prices for long term yield investors, as long as you’re careful with which REITs you pick and have a decently long holding period.
US Stocks – Ugly under the surface
As a whole, the S&P500 is holding up pretty well, only down 5% or so from highs (5700 is the key level to watch if the decline continues to play out).
But under the surface – a lot of stocks are down significantly from highs.
Tesla for example, down almost 40% from highs!
NVIDIA – the poster boy of the AI rally the past 12 months.
Had a very ugly post earnings price action, on what was actually pretty decent earnings.
This is not a good sign, heavy selling on earnings day like that usually suggests that institutional investors are trying to exit positions – and points towards further selling pressure in the weeks ahead.
If indeed the AI rally is over for now – that’s going to spark bad news for a whole host of AI related names (you can see some of the names I monitor below and their price action following NVIDIA’s earnings):
Bitcoin / Crypto price action is not pretty
And that’s even before we get to crypto.
Bitcoin has fallen almost 25% from highs.
And at $82,000, is sitting very finely on the 200 day moving average.
Look under the surface and things get even worse.
Ethereum is down almost 50% from highs.
And Altcoin market cap has retraced much of the post-Trump rally.
China is the only bright spot in markets in 2025
Never thought I would say this, but China is the only bright spot in markets in 2025.
The exact opposite of what we’re seeing from most other markets.
Here’s the Hang Seng, and you can see the monster of a rally in 2025:
Look under the surface – and single stocks are flying.
This is the performance of Alibaba, which has broken above 2024 highs on optimism over AI and Jack Ma’s reappearance.
Certain Safe Haven assets have been performing as intended – Eg. US Treasuries and Gold
For those of you saying that US Treasuries are a terrible buy.
You know what – US Treasuries have been performing exactly as intended.
With a pretty nice rally from 4.8% to 4.2% in 2025.
Gold too is holding up well – still up almost 8% in 2025:
This goes to show that in this new paradigm of higher structural inflation and interest rates, asset classes like gold and Treasuries can serve as a decent hedge, and do have a role in an investment portfolio.
Why are Stock, REIT and Bitcoin prices dropping?
Okay there’s a million things I can talk about here.
But there are 3 points in particular I wanted to zoom in on:
- Tighter liquidity across the board
- Tariffs are making everyone nervous
- After the Nov rally – a very optimistic future was priced in (which did not require a lot to disappoint)
Tighter liquidity across the board
This is probably the biggest factor in my view.
But liquidity has been tightening across the board, in the form of:
- Elon’s DOGE – cutting government staff and expenses
- Fed Quantitative Tightening – continues with no end announced for now
- Tariffs – more on this later
When Trump was elected, everyone expected the above to be offset with some combination of huge fiscal deficit:
- Tax cuts
- Big government spending
- Failing which – big interest rate cuts
But so far at least, none of the stuff in the big spending camp has been announced.
But a lot of stuff in the less spending camp has been announced.
So look through all that talk, and you’ll find that the actual substantive policies enacted by the Trump administration have been a net negative for liquidity.
In that light – the price action from US long term interest rates and risk assets above starts to make sense.
Tariffs are making everyone nervous
The other huge wildcard here – is tariffs.
On Thursday, Trump announced plans for another 10% tariffs on China products, and possibly going forward on 25% tariffs on Canada and Mexico:
What is the impact of tariffs on the economy?
Boy – that is a really, really tough question to answer.
First order thinking would suggest higher consumer prices, and higher inflation.
But we’ve all learnt from the Ukraine war that things are never that simple.
If manufacturers from China can find a way to ship products to Vietnam for example, and ship from Vietnam to US – would that evade the tariffs?
And if the tariffs force more companies to move production into the US, or force countries to buy more US goods – that could actually be a net positive for the US.
We’re moving into a new global world order…
So yes I know the economic textbooks say that free trade is good and that tariffs are bad blah blah.
But as the saying goes – “Toto, I’ve a feeling we’re not in Kansas anymore”.
If it weren’t already obvious to you – the post-World War 2 order of Pax Americana, with US providing security guarantees to the whole world in exchange for global free trade – that world order has been thrown out of the window.
The US today is moving more towards a Monroe Doctrine 2.0, in that the US will no longer help its allies without a clear monetary benefit in return (look at the positions Trump is taking towards Europe, Ukraine etc).
Long story short – the old world order is dead.
Tariffs may be a temporary tool, but we’re never going back to the old paradigm of completely free trade anymore in my view.
We’re going to have the US try to get benefits from its allies for everything they provide, while China tries to build its sphere of influence to replace the void filled by the US, and everybody else in the middle has to decide where they want to stand.
In other words – a rewrite of the global world order.
Follow Financial Horse to avoid missing any post!
After the Nov rally – a very optimistic future was priced in
The final point I wanted to make.
Is that after the November post-Trump rally.
US stock valuations were at nose bleed highs.
S&P500 forward P/E ratio at 22.4x stood at 2021 highs when interest rates were at 0% and the Feds were buying $120 billion in US Treasuries a month.
The only other time valuations were this high – was in 2000 during the height of the Dot Com bubble.
The point is that at these valuations, a very optimistic future was already priced in.
As long as the reality was not as optimistic as what was priced in, it set the market up for disappointment.
And from the 2 points above – what we actually saw from Trump, was a lot more nuanced than the money printing markets were pricing in.
It’s why I keep talking about the valuation discrepancy between China and US.
In China, valuations are pricing in a terrible outcome, so you just need the outcome to be less terrible than priced in, for a decent rally (which we have seen).
The US is the exact opposite.
Will I buy the dip in Stocks, REITs and Crypto? As a Singapore Investor?
Which brings us to the million dollar question.
Will I buy the dip?
For obvious reasons this decision depends on individual risk appetite, how much each investor has already invested, and so on.
But let me just share from my own personal perspective (you can see my full portfolio on FH Premium).
And of course the exact decision will be guided by technical analysis, so I reserve the right to change my mind on a daily basis based on latest price action + news.
Technicals suggest oversold conditions – setting us up for a bounce
The Fear and Greed Index shows extreme fear.
And many single stocks are showing oversold conditions.
The recent selloff also took place very quickly, over a short period of time.
All of these conditions set us up for a potential short-term bounce.
So those looking to play the bounce, there could be an opportunity here.
How do you tell if it’s a dead cat bounce or a buying opportunity?
But what happens after the initial bounce?
Do stocks power to new highs?
Many of you ask how do you tell if this is a dead cat bounce before a further decline?
The short answer is that this involves predicting the future, so you never really know the answer.
You have a view, you express it in your stock positions, and if you’re wrong you change your mind quickly (and also you manage your risk well via position sizing / stop losses).
But what about from a macro perspective? Valuations are not cheap
I’ve said this above and I’ll say it again.
US stock valuations are not cheap.
At this valuations – they’re pricing in a very optimistic future.
And you just need the future to be less optimistic than what is priced in, and there could be downside.
That said if you wanted to slice and dice – then the small – mid caps have comparatively much better valuations and may be the better place to be.
You get the upside if Trump delivers on making America great again, and you sit out the bulk of the downside from buying the large caps at nosebleed valuations if things go wrong.
But based on what I know today? Will I buy the dip in Stocks, REITs and Crypto?
But let’s cut to the chase.
Will I buy more stocks, REITs and Crypto?
I think the answer is probably yes, but like I said I can change my mind any time based on latest price action and news, and I will be guided by technical analysis as well.
I think there are risks and opportunities both ways.
Trump is a deal maker and a businessman at heart – so despite all the brinksmanship, I believe he will do what is good for the US economy.
And at the same time, stocks look to be oversold here, which is always a good time to add to positions.
But with US stocks at current valuations, and with all short-term indicators suggesting liquidity will stay tight (until something changes on the fiscal / monetary front), I could also see the current sell-off turn into something broader.
And that’s just how investing works – you need to be able to entertain multiple possible futures.
I’ll probably add to positions going forward given how oversold things are, but I’ll be very careful about the names that I add to (especially valuations wise).
There’s probably about a 50/50 chance that the AI and crypto rally has ended for now, so some caution is warranted on that front (but note that 50/50 means 50% chance the rally will continue…).
I actually plan to add to China positions as well – because with China the valuations are very cheap, and a lot of the recent news I’m hearing out of China has been very positive, and signal a potential turning point from regulators.
And you know what – I also think that Singapore REITs and Stocks are decent opportunities at current prices. Compared to US, valuations are much cheaper, most of them pay decent 5%ish dividend yields, and I could see the Singapore economy remaining pretty resilient as a safe harbour between US and China.
So that’s how I’m seeing it, but like I said I change my mind regularly when new price action + news comes to light.
Whatever the case, I share my latest views, and the full list of stocks / REITs I am keen to add on FH Premium.
This is an FH Premium post that I am making available to all readers.
If you find content like this helpful, do consider subscribing for FH Premium.
You will also get access to my latest macro views, full stock / REIT watchlist, and personal portfolio (updated weekly).
Hi FH
Looking at worldgovernmentbonds.com/country/united-states what is your opinion about the current US borrowing ability. Short terms yields have eased the pain a bit inline with the Fed Res decision to cut interest rates but whats your prediction for the long end of the curve.
On the times recently is UK’s decision to sell a majority of their US older long dated bonds since most have lost 40% of their value and UAE, China, Japan is reported to have done the same.
That leaves only room to work with the short end.
If the Fed wishes to keep inflation down for the benefit for the long end the short end will definitely stays as it at 4.3%
Will it affect the US ability to turnover the current portion of its long term debt if this persists?
About golds present good run and the Feds final only option there seems to some logic to this.
This is a bit of a worry. Will there be a great reset? And about US markets and for the world markets in fact
Wow that’s a great question. I plan to share more in a FH Premim article.
But short answer – is that Trump / Bessent are making very interesting moves today. But cutting govt expenses and tariffs, they are setting up for a period of short term weak economic growth. If this brings inflation down, it will bring long end yields down, and weaken the USD. This also forces the Feds to cut short rates.
A weaker USD, lower rates, less govt bureaucracy – that could really position the US economy for a period of strength in the mid term. But of course the short term may be a question mark – exactly what we’re seeing markets price in today.