Top Reads of The Week 29/10/2023

Financial conditions continue to tighten across the board. Leveraged companies are most affected, and investors must take caution and prepare accordingly. 

Howard Marks memo is a timely and important read that I recommend investors take the time to digest.

Finally, higher interest rates are a net positive for companies with strong balance sheets, and the key for investors is to focus on companies with strong free cash flow and clean balance sheets.

REITs Dropped Sharply Last Week, What Is Going On?

REITs experienced a sharp drop in share prices last week due to rising interest rates, lower valuations, and recession fears. Investors are concerned about the impact of higher rates on REITs. 

Further Thoughts on Sea Change

Memo discusses how inflation, rising rates, and economic weakness are causing significant changes in financial markets and the economy. He argues these forces will lead to lower asset prices and tighter financial conditions.  

Treasury Bonds Market: 10-Year Yield Tops 5% for First Time Since 2007 

The 10-year Treasury yield surpassed 5% for the first time since 2007, reflecting expectations for tighter monetary policy to combat high inflation. 

Rights Issue Last Priority, Suntec REIT As It Targets $100 Million Strata Divestments 

Suntec REIT is prioritizing $100M in strata office divestments over rights issues to raise funds, citing current weak market conditions. This indicates a cautious approach to raising capital amid volatility.  

Rising Rates Make Big Companies Even Richer  

Large companies are benefiting from higher interest rates as they can access cheap financing, while smaller firms struggle, contributing to inequality. Rate hikes may entrench big firms' dominance.

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