KUALA LUMPUR, July 31 (Bernama) -- Bursa Malaysia ended higher on Friday as investors continued to accumulate blue-chip stocks in line with stronger performances across most regional markets. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.50 points to 1,724.90 from yesterday’s close of 1,720.40. The benchmark index opened 0.83 of a point higher at 1,721.23, and moved between 1,715.67 and 1,730.12 throughout the day. The broader market was positive with gainers outpacing losers 707 to 402, while 547 counters were unchanged, 1,085 untraded and 56 suspended. Turnover expanded to 3.03 billion units valued at RM3.56 billion from 2.49 billion units valued at RM2.25 billion on Thursday.
While US Federal Reserve rate cuts are welcomed by manufacturers like Drew Greenblatt, president of Marlin Steel, they offer little relief from the bigger challenges faced by US factories, especially the intense competition from China. Greenblatt's Baltimore-based factory saw a surge in orders during the COVID-19 pandemic as a key client shifted production out of China, but those orders dried up this year when the customer moved back to China to cut costs.
Despite a half-point rate cut by the Fed, Greenblatt's situation highlights deeper issues that lower rates can't solve, such as supply chain disruptions, rising material costs, and growing labor unrest. The fierce competition from China remains a significant hurdle for many US manufacturers, particularly as customers prioritize cost savings.
Vice President Kamala Harris is set to introduce new economic policies aimed at helping Americans build wealth, with specific incentives for businesses. This comes ahead of the November 5 election, where economic competition with China has become a central issue. Both Harris and former President Donald Trump have outlined plans to respond to China’s competitive threat, with the Biden administration proposing restrictions on Chinese software and hardware in US vehicles due to national security concerns.
Greenblatt, like many manufacturers, is calling for tougher trade measures, particularly tariffs that could boost domestic production by making Chinese goods less competitive. He also points to the challenge of competing with countries that subsidize their currencies, making their products cheaper in comparison.
While high interest rates have contributed to the slowdown in US manufacturing, the Fed’s rate cuts could only provide limited short-term benefits. US manufacturers have already shed 7,000 jobs in 2023 after strong job growth in the previous two years. Despite a surge in production in August, the sector remains under pressure from rising input costs and ongoing supply chain disruptions.
For manufacturers like Kevin Kelly, who runs Emerald Packaging in California, the challenges extend beyond competition. A sudden spike in electricity prices due to higher summer rates pushed his power bill up by $60,000 in June. To offset costs, Kelly is installing solar panels and adjusting factory operations, but these measures have reduced output.
Further complications could arise from an upcoming port strike on the East Coast and Gulf of Mexico, which could disrupt shipments and force manufacturers to seek costly alternatives for moving goods. These factors continue to weigh on US factories, leaving rate cuts as only a partial solution in the broader battle for survival.
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