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...
Magnificent Seven Face Growing Scrutiny
After months of powering Wall Street’s gains, the Magnificent Seven tech giants — Amazon, Alphabet, Apple, Meta, Microsoft, Nvidia, and Tesla — are losing steam. Rising doubts about AI’s near-term profitability, stretched valuations, and shifting capital into other sectors have raised concerns about how much further tech can run.
Nvidia earnings ahead: Seen as a critical test for the sector’s momentum.
Rotation in play: Energy, materials, and real estate all outperformed tech last week.
Tech lagging despite Powell boost: Even with Powell’s dovish hints on rate cuts, the tech-heavy Nasdaq dropped 1.6% for the week.
Why Investors Are Pulling Back
Valuations stretched: Investors like Joshua Boyer are trimming holdings, citing overextended prices relative to earnings.
Retail selling picks up: For the first time in two months, retail investors were net sellers, focusing on names like Palantir, Alphabet, and Broadcom (JPMorgan data).
AI reality check:
OpenAI’s GPT-5 launch fell flat, failing to meet expectations of a “PhD-level expert.”
Meta froze AI hiring.
MIT report: widespread AI adoption hasn’t translated into profits.
Venture capitalists warn of an AI “vibe shift” reminiscent of the dot-com bubble.
Macro backdrop: Stubborn inflation and labor market cracks keep investors cautious, even as rate cuts loom.
Market Context
Nasdaq surged 41% since April, pushing valuations higher.
Low August trading volumes add to volatility.
Broader economy pressured by trade war and immigration policies, making defensive plays (utilities, housing, consumer staples) more attractive.
Key Investor Takeaways
Rotation underway: Investors are reallocating from tech into energy, real estate, banks, and defensive plays like Walmart and utilities.
AI hype cooling: Failures like GPT-5 and muted profit growth highlight risks of overestimating AI’s short-term potential.
Valuation risks: The Magnificent Seven look stretched; profit-taking is growing.
Stay tactical: Tech remains volatile, with Nvidia’s earnings as the next major catalyst.
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