The US labour market showed signs of a steady slowdown in October, with job openings increasing moderately and layoffs declining, according to the latest Job Openings and Labor Turnover Survey (JOLTS) report released by the Bureau of Labor Statistics on Tuesday. Job openings, a key indicator of labour demand, rose by 372,000 to 7.744 million at the end of October. However, the September figures were revised downward to 7.372 million from the initially reported 7.443 million. Economists polled by Reuters had anticipated 7.475 million vacancies. Labour Market Dynamics While job openings increased, hires dropped by 269,000 to 5.313 million, and layoffs fell by 169,000 to 1.633 million. These figures suggest a gradual cooling of the labour market rather than a sharp contraction. Hurricanes and strikes also impacted October’s labour market data. Rebuilding efforts in storm-affected regions and the resolution of strikes at Boeing and another aerospace company are expected to contribute to a ...
Nomura Holdings Inc. has advised investors to reduce their holdings in Chinese equities and redirect their investments towards Indonesia and Malaysia. The move is based on the view that these Southeast Asian markets will benefit more from anticipated cuts in US interest rates. As part of this strategy, Nomura has upgraded Malaysian and Indonesian stocks to 'overweight' from 'neutral,' while downgrading MSCI China to 'neutral' from 'overweight.'
Key Takeaways:
Rationale for the Shift: Nomura's strategists, led by Chetan Seth, believe that Indonesian and Malaysian markets are better positioned to capitalize on the expected US interest rate cuts. This shift comes amid rising interest from foreign investors in these markets, which are seeing a second consecutive month of inflows.
Chinese Market Concerns: China's equity markets have struggled recently, with the MSCI China index down around 3.6% since the end of May. Concerns over China's faltering economy, ongoing real estate slump, and geopolitical tensions with the US have weighed on investor sentiment.
Positive Outlook for ASEAN Markets: Nomura's analysts see Indonesia as "possibly the best way" to bet on a revival in emerging-market stocks as the US Federal Reserve begins to cut rates. The shift reflects a broader optimism about Southeast Asia's economic resilience and growth potential.
Historical Success of Nomura's Picks: Investors may take Nomura's recommendations seriously, as the bank's strategists previously upgraded Taiwanese equities in December, which has resulted in the Taiex Index rising by around 25% this year. This contrasts with the more modest gains seen in other Asian markets.
Foreign Investor Activity: In August, overseas funds purchased $874 million in Indonesian stocks and $240 million in Malaysian shares, reflecting growing confidence in these markets.
Nomura’s decision to pivot away from Chinese equities towards Indonesia and Malaysia highlights the ongoing challenges facing China’s stock market and the emerging opportunities in Southeast Asia, particularly in the context of expected changes in US monetary policy.
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