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
Weak U.S. labor data pushed traders to almost fully price in a September Fed rate cut, sending Treasuries and tech stocks higher. Markets now anticipate at least two cuts in 2025, with Friday’s payrolls report as the next key test.
Market Snapshot
S&P 500: +0.5% to 6,438.26
Nasdaq Composite: +1% to 21,497.73
Dow Jones: –0.1% to 45,271.23
30Y Treasury Yield: Near 5% before rebounding
USD: Weaker; Dollar Index fell
Gold: Record US$3,640.10 (+1.3%) on rate cut bets
Key Drivers
JOLTS Report: Job openings fell to 10-month low, signaling softer labor demand.
Fed Expectations: Traders now see 95%+ chance of a 25bps cut in September; at least two cuts priced in for 2025.
Tech Rally:
Alphabet hit record high (Google Chrome ruling).
Apple advanced on AI-powered Siri search plans.
Corporate Moves: Salesforce warned on weaker sales growth after hours.
Fed & Analyst Commentary
Fed Governor Waller: Supports starting cuts in September, with debate over pace.
Powell (Jackson Hole): More dovish than expected, signaling cuts warranted amid “shifting risks.”
Boockvar (The Boock Report): Jobs slowdown aligns with Fed preparing a 25bps cut.
Evercore’s Guha: Weak openings make September cut harder to derail.
Principal’s Shah: Slowing demand not recessionary — consumers still spending.
BofA: Warns of Fed policy mistake — easing too aggressively could stoke inflation.
Market Positioning
Flows:
BofA clients bought US$1.5B in small-cap stocks (2nd-largest since 2008).
US$2.3B inflows into single stocks; US$2.1B into ETFs (week ended Aug 29).
HSBC View: Raised S&P 500 year-end target to 6,500.
Barclays/Federated Hermes: Advise dip-buying given resilient growth and earnings.
Risks & Opportunities
Near-Term Risk: Friday’s payrolls; surprise downside could push yields lower.
Inflation Risk: Tariffs, margin protection, and labor supply still potential upside risks.
AI Spending: Key driver for equities — lofty expectations may cut both ways into 2026.
Investor Watch
Equities: Dip-buying favored; big tech leadership intact, but AI spending expectations are a critical risk.
Bonds: Long bias supported as soft jobs reinforce easing trajectory.
FX: Dollar under pressure on dovish Fed bets.
Gold: Record highs reflect hedging demand; momentum tied to rate outlook.
Next Catalyst: Friday’s non-farm payrolls — consensus +75k jobs, jobless rate at 4.3%.
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