KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
Three US Federal Reserve officials indicated on Monday that they expect interest rates to continue declining over the next year, but stopped short of committing to a rate cut at their upcoming meeting on Dec. 17-18.
Key Remarks from Fed Officials
Christopher Waller (Fed Governor)
- Leaning Towards a Cut:
- Inclined to support a rate cut in December but emphasized that his decision will depend on upcoming data, particularly on inflation and economic activity.
- “Policy remains significantly restrictive, and cutting again will mean pressing the brake pedal less hard,” Waller said.
- Inflation Concerns:
- Highlighted the risk of inflation stalling above the 2% target, though he sees no evidence of persistent price increases in key service categories.
John Williams (New York Fed President)
- Cautious Approach:
- Stressed that the path for policy depends on data, emphasizing the uncertainty of the economic outlook.
Raphael Bostic (Atlanta Fed President)
- Keeping Options Open:
- Said he would wait for more data before deciding on a December rate cut.
Recent Rate Movements
- The Fed has reduced rates by three-quarters of a percentage point since September, starting with a larger-than-usual half-point cut.
- Rates now stand at 4.5%-4.75%, after peaking at 5.25%-5.5% earlier this year.
Economic Context
Inflation:
- Core PCE price index rose 2.8% in the 12 months ending in October, signaling sticky inflation in the service sector.
GDP Growth:
- US GDP expanded 2.8% in the last quarter, reflecting strong personal and business spending.
Labour Market:
- The labour market shows signs of balance, though strikes and storms have made clean data interpretation challenging.
Market Sentiment
- Investors are pricing in the possibility of a pause in rate cuts, particularly given concerns about inflation remaining sticky.
Looking Ahead
Payroll Data:
- The November payrolls report (due Friday) will be a key determinant for the Fed’s decision in December.
December Meeting:
- Policymakers will weigh whether to proceed with a rate cut or hold steady, based on updated economic indicators.
Framework Review:
- In January, the Fed will begin reviewing its flexible average inflation targeting framework, with Waller suggesting the current strategy may not be suitable for dynamic economic conditions.
Investor Takeaway
- The Fed’s data-dependent approach underscores uncertainty about near-term policy moves.
- A clearer direction may emerge after Friday’s payroll report and Fed Chair Jerome Powell’s remarks at the upcoming FOMC meeting.
- For now, markets remain divided on whether the cutting cycle will continue in December.
Comments
Post a Comment