KUALA LUMPUR, Dec 16 (Bernama) -- Bursa Malaysia extended its positive performance, closing higher for a fourth consecutive session, supported by improving local market sentiment underpinned by a firm domestic macroeconomic backdrop. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.59 points, or 0.28 per cent, to 1,648.31, from Monday’s close of 1,643.72. The index had opened 0.95 of a point lower at 1,642.77, and moved between 1,636.50 and 1,648.71 throughout the trading session However, on the broader market, decliners beat gainers 699 versus 408. A further 520 counters were unchanged, 1,149 untraded and 12 suspended. Turnover rose to 2.59 billion units worth RM2.27 billion from 2.50 billion units worth RM2.16 billion on Monday.
Key Takeaway
A September Fed rate cut looks certain. The real question for investors is whether this marks the start of a full easing cycle or just a one-off move. Friday’s jobs data and next week’s annual revision will shape the answer.
Why Friday’s NFP Matters
The August Non-Farm Payrolls (NFP) is seen as the final piece before the Fed’s Sept. 17 decision. Powell has already signaled dovish intent, meaning the bar is high to prevent a cut.
Moderately Weak Data (50k–100k jobs): Confirms a 25bp cut but cools hopes for back-to-back cuts. Short-term boost for equities possible.
Sharply Weak Data (below 30k jobs): Could trigger recession fears, raising chances of a larger 50bp cut — but risk-off sentiment may weigh on stocks.
The Bigger Test: BLS Annual Revision
On Sept. 9, the Bureau of Labor Statistics will release its annual benchmark revision. Nomura expects 600k–900k jobs to be erased from the past year’s data, showing job growth was overstated.
Likely tied to flaws in the “birth-death” model of business formation.
Suggests job growth was more concentrated in fewer sectors.
Fed is already aware of this, so it won’t derail policy direction.
Fed’s Path: Two Scenarios
Sustained Easing (Nomura’s View): 25bp in Sept, then one cut per quarter into 2026.
Brief Adjustment (Rob Kaplan’s View): September is a “one and done” cut, not the start of a cycle.
What This Means for Investors
If easing cycle begins: Small-caps (Russell 2000) and liquidity-sensitive assets like crypto could benefit. Biotech historically outperforms in easing cycles.
If one-off cut: Risk of “sell the news.” With cuts already priced in, markets may pull back on profit-taking.
Bottom Line
The September cut is priced in at nearly 100%. The bigger risk now is what happens after. Friday’s NFP and Tuesday’s revision will guide expectations, but the Fed’s forward path — slow easing or just a pause button — is what really matters for markets.
Comments
Post a Comment