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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
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Wall Street Prepares for Powell’s Jackson Hole Speech Amid Rate Cut Speculation

 

As Wall Street anticipates Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium, markets are bracing for a potential "reality check" on expectations for aggressive interest-rate cuts. Bond yields have climbed, and stocks have faltered as traders speculate on Powell's likely stance on future monetary policy.

Key Takeaways:

  1. Market Sentiment and Bond Yields: In the lead-up to Powell’s speech, U.S. Treasury yields have risen, particularly on shorter maturities, signaling market concerns about the pace of future rate cuts. The dollar strengthened, and the S&P 500 lost ground, with tech giants like Nvidia and Intel seeing significant sell-offs. This reflects growing caution among investors as they await Powell’s guidance.

  2. Diverse Views from Fed Officials: Fed officials have expressed varying opinions on the timing and magnitude of rate cuts. Boston Fed President Susan Collins and Philadelphia Fed President Patrick Harker both advocate for a “gradual, methodical pace” of easing, while Kansas City Fed President Jeffrey Schmid calls for more data before supporting any cuts. Despite differing views, the consensus appears to favor a cautious approach to easing, with most expecting a 25 basis-point cut in September.

  3. Powell’s Likely Approach: Analysts, including those at NatAlliance Securities and Wolfe Research, believe Powell will likely signal the start of an easing cycle in September but will favor a more measured approach, possibly initiating with a 25 basis-point cut. This "slower to lower" strategy is expected to allow the Fed to ensure that inflationary pressures are fully under control before making more significant policy adjustments.

The broader market sentiment remains mixed, with some traders possibly overestimating the likelihood of aggressive rate cuts. As Powell prepares to address these expectations, his remarks could either temper or reinforce market optimism about the pace of monetary easing through the end of the year.

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