The Week In Numbers: The Waiting Is Finally Over

It has finally happened. The US Federal Reserve – in the face of market tantrums, aplenty – has finally found the courage to increase interest rates. It raised the Fed Fund rate, which is the rate of interest that banks charge each other for overnight loans, by 0.25%. Opinions will, naturally, continue to be divided as to whether the Fed was right to hike the cost of borrowing. But what’s done, is done.

A raft of US banks has already started to raise their Prime Rates, which is the rate of interest that they charge customers for loans. They have not raised their Deposit Rates, though. Look out for a response from our three local banks, namely DBS Group (SGX: D05), UOB (SGX: U11) and OCBC (SGXL: O39).

Interestingly, the US Fed could point to the highest rate of inflation since May 2014 as justification for its rate hike. The US Bureau of Labor Statistics said core inflation, which excludes volatile items such as food and fuel, increase 2% in November compared to a year ago. By that measure, another rate hike might even be warranted. The headline rate, however, came in at 0.5%. You pay your money, you take your choice.

The price of a barrel of “black gold” fell to an 11-year low of below US$36 this week. The losing streak for oil came as traders fretted over a global glut and a warmer winter. A mild winter has been forecast for many countries in the northern hemisphere this year, as a result of the El Nino effect. So, no chance of a White Christmas then?

There was good news for Singapore shopkeepers this week but only if they were involved in the car trade. Retail sales rose 2.7% in October compared to a year ago, thanks to a rise in sales of motor vehicles. Excluding motor vehicles, retail sales fell 4.6%. Food and beverage sales were also on the back foot. They were down 3.8%. Could that be good news for motor dealer Jardine & Carriage (SGX: C07)?

And finally, a 15-year-old Swiss boy has been rewarded for his honesty. A 1,000 Swiss franc (S$1,421) bank note that he found and handed in five years ago has not been claimed. So according to Swiss law, as the finder of the property he can get to keep the property. I wonder what he plans to do with the money now. If the money had been invested in Switzerland’s stock market five years ago, it would be worth 30% more today.

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