KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Wall Street was shaken by hotter-than-expected inflation data, sending bond yields soaring and reinforcing fears that the Federal Reserve will delay rate cuts. Despite initial losses, tech stocks rebounded, with the Nasdaq 100 erasing a 1% decline and Tesla leading the charge.
🚨 Inflation Surges, Rate Cuts Pushed Back
The US consumer price index (CPI) rose at its fastest pace since August 2023, dashing hopes for early Fed rate cuts. Core CPI, which excludes food and energy, jumped 0.4% in January, fueling concerns that inflation remains stubbornly high.
📉 Market Impact:
- Treasury 10-year yields surged nine basis points to 4.62%, marking the biggest jump since Dec 18.
- Money markets now predict only one Fed rate cut this year—likely in December.
- Stocks pared losses, with the S&P 500 down 0.3%, the Nasdaq 100 up 0.1%, and the Dow Jones slipping 0.5%.
💡 Investors React: "Higher-for-Longer" Reality Sets In
💬 Ellen Zentner (Morgan Stanley Wealth Management): "Higher-for-longer just got a little longer. The Fed wanted proof that inflation is cooling, but today they got the opposite."
💬 Seema Shah (Principal Asset Management): "If inflation stays this high for a few months, the Fed might not cut rates at all this year."
💬 Chris Zaccarelli (Northlight Asset Management): "It's too early to predict rate hikes, but the market is starting to consider the Fed’s next move could be an increase in late 2025 or early 2026."
💹 "Buy the Dip" Mentality Prevails in Tech
Despite inflation fears, investors snapped up tech stocks, particularly those tied to artificial intelligence (AI).
📈 Market Movers:
- Tesla led megacap gains
- Meta Platforms extended its winning streak to 18 sessions
- Cisco Systems soared in after-hours trading on an upbeat sales forecast
💬 Steve Sosnick (Interactive Brokers): "The bond market took a hit, but stocks are still treated as a hedge against modest inflation. The enthusiasm for AI keeps fueling the tech rally."
⚠️ Bond Market Faces Pressure
- 10-year Treasury yields are creeping toward 4.80%, a level that could put further pressure on stocks.
- The US dollar remained steady, while gold prices held firm.
- Crude oil tumbled 2.7% to $71.35 per barrel after the US and Russia agreed to talks on ending the Ukraine war.
💬 Matt Maley (Miller Tabak): "The latest CPI data, combined with last week’s job report, suggest the Fed might delay rate cuts even longer."
💬 Oscar Munoz & Gennadiy Goldberg (TD Securities): "Hotter inflation means the Fed is staying on guard. We remain long 10-year Treasuries at these attractive levels."
📊 Key Market Moves
- S&P 500: 🔻0.3%
- Nasdaq 100: 🔺0.1%
- Dow Jones: 🔻0.5%
- Bitcoin: 🔺0.6% ($96,978.82)
- Ether: 🔺2.1% ($2,678.15)
- 10-Year Treasury Yield: 🔺4.62% (+9 bps)
- West Texas Crude: 🔻2.7% ($71.35)
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