The Asia Trade 8/12/25
"Bloomberg: The Asia Trade" brings you everything you need to know to get ahead as the trading day begins in Asia. Bloomberg TV is live from Sydney with Paul Allen, getting insight and analysis from newsmakers and industry leaders on the biggest stories shaping global markets. (Source: Bloomberg)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Bloomberg
4 minutes ago
- Bloomberg
Australia's Wage Growth Stays Elevated in Tight Labor Market
Australia's annual wage growth remained elevated last quarter, underscoring a tight labor market and persistently weak productivity — a key challenge for the Reserve Bank as it seeks to rein in cost pressures. The Wage Price Index advanced an annual 3.4% in the three months through June, compared with economists' estimate of 3.3%, Australian Bureau of Statistics data showed Wednesday. On a quarterly basis, wages grew 0.8%, matching estimates. The report showed public sector wage growth was higher than the private sector.
Yahoo
22 minutes ago
- Yahoo
Day traders scorched Wall Street pros with a hot summer. But September could chill their vibe.
Day traders outperformed pros this summer but face a potential September pullback. Retail traders drove stock gains, but historical trends suggest a volatile September. Hedge funds struggled with 'garbage' stock rallies, but might be better positioned for the fall. Day traders have had a blockbuster summer, outpacing professional money managers and leaving some hedge funds bruised. But that dominance may be short-lived. If historical trends hold, a seasonal pullback in retail activity could collide with a surge in volatility this September, threatening to derail the rally they helped drive. While nothing has topped the meme-stock craze of 2021, retail traders have been enjoying a busy — and lucrative — summer. Citadel Securities, which handles more than a third of the US retail equity trades, said in a client note last week that Main Street has remained consistently bullish over the last three months. Retail has bought up stocks in 14 of the last 16 weeks since April and options buying has been bullish for 14 consecutive weeks, according to Scott Rubner, head of equity and equity derivatives strategy at the Miami-based trading giant. Their optimism has been rewarded. The S&P 500 has gained 8% since June and nearly 30% since its low in early April. The Nasdaq has fared even better. It's not just AI-adjacent companies driving the gains, either — day traders have led a rally in so-called "garbage" stocks with questionable business prospects, such as brick-and-mortar retailers Kohl's, American Eagle, and Krispy Kreme. Many professional money managers, by contrast, have missed the boat on the stock rally, taking a cautious approach amid signs of economic threats. Citadel Securities' institutional clients have been bearish 8 of the past 12 weeks, Rubner said. Some hedge funds have been punished. The surge in junk stocks has confounded models at equity quant funds, contributing to a weekslong bloodletting, Business Insider previously reported. Many long-short equity hedge funds have navigated the market well, but those with more pessimistic outlooks have faltered. One hedge fund exec told BI that brick-and-mortar retailers with significant tariff exposure nonetheless trading higher than before tariffs were announced — especially with recession indicators blinking — "doesn't make sense to us fundamentally." David Einhorn's Greenlight Capital — which in the first quarter believed a recession and bear market were in the offing — lost 3.8% in the second quarter, trimming its year-to-date gain to just 4.1%, according to an August 7 investor letter seen by Business Insider. "While we anticipated the possibility of 'rip your face off' rallies, we certainly didn't expect the market to reach new all-time highs so quickly," the letter reads. "We still believe that the economy is slowing and could very well be headed into a recession. The market obviously disagrees." The diverging views among professional and amateur investors hit a new level in August after an unexpectedly poor jobs report and signs that inflation is ticking back up. Stocks fell that Friday, August 1 — but quickly rallied the following week. "The US stock market does not always reflect the broader economy," Rubner wrote, noting that competition is increasing for "dip alpha" — that is, investors are quick to buy stocks after a market dip, betting that stocks just went on sale and will rise in short order. A critical pivot point As we head toward fall, the stage is set for a reversal of fortune. If August is a lazy day at the beach for the stock market, September is like an icy cold plunge. While stocks generally rise in August — "consistent with the number of vacations, pool parties, and the general unwillingness to put on a new short during August," Rubner says — September is the worst month for performance, according to data going back to 1928. It's also historically more volatile. This persistent seasonal quirk is in part a byproduct of the summer holiday — traders return from vacation and rebalance their books as they gear up for an end-of-year push, cutting positions to make room for new ones. Many mutual funds similarly rebalance in September, dumping losing positions and adding to the downward pressure. September is also the nadir for retail traders. Retail participation traditionally thins as fall arrives, decelerating in August before hitting September, the lowest activity month of the year. Whether they're reacting to September's historic weakness or a factor in driving it, if Main Street money pulls back, that may take some wind out of the market's sails. And both macroeconomic and fundamental weaknesses that the market previously shrugged off could loom large. Einhorn's Greenlight says outside of companies benefiting from AI and the data center boom, "it is hard to find other areas that are doing well." The fund expects "the increased bite from tariffs to show up on shelves and in the data by September or October." Additionally, Rubner expects systematic, factor-driven strategies to reach full exposure by the end of August, "increasing vulnerability to downside shocks." In dissecting the rally in junk stocks and corresponding quant hedge fund losses, former AQR financial market research head Aaron Brown said in a column for Bloomberg that the likeliest resolution "is that the garbage rally runs out of steam and the junk stock prices sag back." He continued: "The nimble traders who took daily profits keep their winnings, the quant funds make back their losses, and the losers are less nimble day traders and medium or long-term investors who overpaid for junk." Overall retail participation in the US stock market has steadily increased, but a showdown is looming next month. Seasonal headwinds could test the resilience of the day traders and end their summer winning streak over the professional money managers. Read the original article on Business Insider Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
29 minutes ago
- Yahoo
Dollar slips as investors eye September Fed cut
By Rae Wee SINGAPORE (Reuters) -The dollar weakened on Wednesday after a tame reading on U.S. inflation bolstered expectations of a Federal Reserve rate cut next month, with President Donald Trump's attempts to extend his grip over U.S. institutions also undermining the currency. U.S. consumer prices increased marginally in July, data showed on Tuesday, in line with forecasts and as the pass-through from Trump's sweeping tariffs to goods prices has so far been limited. Investors eyeing imminent Fed cuts cheered the data and moved to price in a 98% chance the central bank would ease rates next month, which in turn dragged on the dollar. Against the yen, the dollar was last 0.05% lower at 147.76, while the euro was steady at $1.1676, having risen 0.5% in the previous session. The dollar index last stood at 98.08, after falling roughly 0.5% on Tuesday. "The July CPI report showed less evidence of tariff pass-through to consumer prices...(but) I think a September rate cut is less than certain, probably not as certain as current market pricing," said Carol Kong, a currency strategist at Commonwealth Bank of Australia. "As the last payroll shows, one report can be sufficient to move the policy debate to one side or another. So I think we still have to wait until the remaining data to print before making a strong case about a rate cut or an on hold decision." U.S. Treasury yields similarly fell on the heightened rate cut expectations, with the two-year yield last at 3.7371%, having swung in a range of nearly 10 basis points on Tuesday. The benchmark 10-year yield was little changed at 4.2965%. [US/] Also eroding investor confidence in the dollar were fresh attempts by Trump to undermine Fed independence, after White House spokeswoman Karoline Leavitt said on Tuesday that the U.S. president was considering a lawsuit against Fed Chair Jerome Powell in relation to his management of renovations at the central bank's Washington headquarters. Trump has been at loggerheads with Powell and has repeatedly lambasted the Fed Chair for not easing rates sooner. The president also hit out at Goldman Sachs CEO David Solomon, saying the bank had been wrong to predict U.S. tariffs would hurt the economy and questioned whether Solomon should lead the Wall Street institution. Elsewhere, sterling gained 0.03% to $1.3504. Britain's jobs market weakened again though wage growth stayed strong, according to data on Tuesday, underscoring why the Bank of England is so cautious about cutting interest rates. "(The) UK jobs figures pointed to the labour market remaining in fragile shape," said Michael Brown, senior research strategist at Pepperstone. "My base case still has the next 25bp cut pencilled in for November, though there is a long way to go, and a lot of data to come, before then." In other currencies, the Australian dollar dipped 0.05% to $0.6526, while the New Zealand dollar fell 0.03% to $0.5953. The Reserve Bank of Australia on Tuesday cut interest rates as expected, and signalled further policy easing might be needed to meet its inflation and employment goals as the economy lost some momentum. Sign in to access your portfolio
