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.
Key Takeaway
US stocks remain near record highs, but next week’s CPI and PPI data could shift sentiment as investors weigh Fed rate cuts, tariffs, and rising bond yields. The S&P 500 has gained 10% in 2025 so far, but valuations look stretched.
What Investors Are Watching
Inflation in Focus: Thursday’s CPI release is the week’s main event. A hotter-than-expected print could test assumptions of imminent Fed cuts.
Rate Cut Odds: Markets are pricing in a 90% chance of a 25bps cut at the Sept 16–17 Fed meeting, with some betting on a 50bps move. Nearly 70bps of easing is priced in by year-end.
Producer Prices: Wednesday’s PPI data could show the impact of import tariffs, after July’s PPI saw the sharpest jump in three years.
Market Risks in Play
Tariffs Back in Focus: A US appeals court ruled most of President Trump’s tariffs illegal, creating uncertainty as the administration pushes the Supreme Court to intervene.
Bond Market Volatility: Long-dated Treasury yields spiked early this week, with the 30-year touching 5% before retreating to 4.78%. Rising yields remain a risk for equities.
Valuation Concerns: The S&P 500 trades at 22.4x forward earnings, well above its long-term average of 15.9, raising questions on whether earnings growth can justify current levels.
Market Snapshot
S&P 500: +10% YTD, closed at a record high Thursday
Valuation: 22.4x forward PE vs. 15.9x long-term average
Sentiment: Fed rate cuts remain the overwhelming driver of equity optimism
Analyst Views
“Stocks aren’t pricing in a lot of risks right now. They look fully valued.” — Matthew Miskin, Manulife John Hancock Investments
“Unless CPI is egregiously higher, the Fed will still cut in September.” — Art Hogan, B Riley Wealth
“Tariff uncertainty has returned… and that doesn’t help corporate America, consumers, or investors.” — Art Hogan
Bottom Line
The market is riding Fed cut optimism, but with inflation, tariffs, and bond yields in play, September could be choppy. Investors should prepare for volatility around Thursday’s CPI release.
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