Skip to main content

Featured Post

Market Daily Report: Bursa Malaysia Ends Higher In Line With Most Regional Markets

KUALA LUMPUR, Sept 20 (Bernama) -- Bursa Malaysia ended higher on Friday in line with most Asian markets, mirroring gains from Wall Street, where investors welcomed the US Federal Reserve's substantial interest rate cut. The FTSE Bursa Malaysia KLCI (FBM KLCI) rose by 3.17 points, or 0.19 per cent, to 1,668.82 at the close from Thursday's close of 1,665.65. It opened 5.03 points higher at 1,670.68, trading between 1,668.48 and 1,674.04 throughout the session. In the broader market, gainers outpaced decliners 732 to 468, while 465 counters were unchanged, 850 untraded and 32 suspended. Turnover swelled to 4.19 billion units worth RM5.97 billion, from Thursday's 3.99 billion units worth RM4.08 billion. UOB Kay Hian Wealth Advisors head of investment research, Mohd Sedek Jantan, noted the FBM KLCI's gains were led by utilities, logistics, and banking stocks, reflecting improved market sentiment. Additiona
Post a Comment

Fed Poised to Maintain Rates, Hints at Potential September Cut

The Federal Reserve is expected to hold its benchmark interest rate steady this week while signaling a potential rate cut in September, moving closer to reducing rates from their highest level in two decades.

Key Points:

  • Current Rate: The Fed's Federal Open Market Committee (FOMC) is anticipated to keep the benchmark rate in the range of 5.25% to 5.5%, where it has remained for a year.
  • Inflation Progress: Policymakers are likely to acknowledge progress towards the 2% inflation target, essential for considering rate cuts. Recent consumer price data for June showed promising signs.
  • Unemployment Concerns: With unemployment rates slightly increasing, the Fed may suggest that less restrictive policies are soon appropriate.
  • Language Shift: The Fed might update its statement to reflect confidence in inflation nearing the 2% goal, potentially hinting at imminent rate cuts.

Economists' Insights:

Subadra Rajappa of Societe Generale anticipates a change in the Fed’s language to suggest a cut in September, referencing recent remarks by New York Fed President John Williams about moving away from restrictive policies.

Rate Decision:

All surveyed economists expect no rate change this meeting. The FOMC might highlight improved inflation prospects in their statement, indicating confidence in reaching the 2% target and signaling upcoming rate reductions.

Discussion on Rate Cuts:

While a rate cut this week is unlikely, it may be discussed. Prominent voices, including former Fed officials, have recently supported a July rate cut. Chicago Fed President Austan Goolsbee might dissent, advocating for an immediate cut.

Press Conference Expectations:

Fed Chair Jerome Powell will likely be questioned on September's outlook and the pace of easing for the rest of the year. He is expected to reiterate that policy decisions will be "data dependent" and made "meeting by meeting." Powell may also address concerns about the cooling labor market, noting the rising unemployment rate, now at 4.1%.

Investor Sentiment:

Investors are pricing in a quarter-percentage point cut for September and anticipate further cuts in November and December, according to futures.

Derek Tang of LH Meyer/Monetary Policy Analytics expects Powell to clarify what level of economic weakening would prompt the Fed to reconsider its current pace of rate cuts.

Political Neutrality:

Powell is expected to maintain that the Fed's decisions are unaffected by political considerations, even if asked about the upcoming presidential election.

Conclusion: As the Fed prepares to announce its decision, all eyes are on potential signals for a September rate cut, amidst a backdrop of improving inflation data and a slightly cooling labor market.

Labels:

Comments

Post a Comment

Popular posts from this blog

INTC Share Watch and News

Stock Info Market Monitor Company Profile Intel Corporation designs, manufactures, and sells integrated circuits for computing and communications industries worldwide. It offers microprocessor products used in notebooks, netbooks, desktops, servers, workstations, storage products, embedded applications, communications products, consumer electronics devices, and handhelds. The company also offers system on chip products that integrate its core processing functionalities with other system components, such as graphics, audio, and video, onto a single chip. It also provides chipset products that send data between the microprocessor and input, display, and storage devices, such as keyboard, mouse, monitor, hard drive, and CD or DVD drives; motherboards that has connectors for attaching devices to the bus, and products designed for desktop, server, and workstation platforms; and wired and wireless connectivity products, including network adapters and embedded wireless cards used to translat
1 comment
Read more

Analysts See Asset Resilience of Bank of Chengdu Benefiting Hong Leong Bank

Analysts predict that the asset quality of Bank of Chengdu, in which Hong Leong Bank Bhd holds a 19.76% stake, will remain robust due to its strict risk management policies and proactive measures. Key Takeaways: Strong Risk Management Practices : According to CIMB, Bank of Chengdu has adopted a conservative risk culture, performing thorough assessments of location, developer reputation, project viability, and management integrity before financing property projects. The bank closely monitors early warning signals like construction progress, sales progress, budget overruns, and fund usage by developers to mitigate potential risks. Proactive Measures Against Property Slowdown : The bank's precautionary measures allowed it to reduce exposure to problematic property loans and exit risky loans before China's property market slowdown. This conservative approach is expected to benefit Hong Leong Bank by minimizing potential asset quality concerns. Continued Optimism and Buy Recommendat
Post a Comment
Read more

Investors Keep Buying US Junk Debt Despite Weak Protections

  When US-based construction material supplier Wilsonart issued a junk bond to raise US$500 million (RM2.13 billion) for an acquisition this summer, a research firm warned potential investors about the bond's weak protections. The bond’s covenants could allow the company to move valuable assets to another entity and raise more money, potentially disadvantaging bond investors, according to Covenant Review , a research firm. This warning comes amid growing concerns in credit markets as more companies engage in practices like "liability management exercises," where they borrow more against the same assets. These practices, often favoring some creditors over others, have been dubbed "creditor-on-creditor violence," prompting some creditors to unite to protect their interests. Despite the warnings, investors eagerly purchased Wilsonart's offering, underscoring a paradox in US credit markets. While investors face the consequences of weak covenants, they continu
Post a Comment
Read more