Bad news is good news for markets craving Fed ‘rocket fuel'
LONDON : Markets are trying hard to see the bright side of bad news in the US, anticipating dour data will trigger the economic 'rocket fuel' of Federal Reserve (Fed) interest rate cuts so craved by President Donald Trump.
Odds for a September cut now stand at about 94%, CME Fedwatch showed, from 63% last week.
Market participants see at least two quarter-point cuts by year-end.
The odds shot up after disappointing non-farm payrolls data on Friday, causing equity markets to swoon and Trump to shoot the messenger, firing the head of labour statistics and promising to replace her within days.
Institutional independence is turning into a short bet in the US.
The early resignation of Fed governor Adriana Kugler will let Trump pick her successor, adding to concerns about partisan loyalty invading the staid world of central bank policy.
Asian markets followed gains on Wall Street, with MSCI's broadest index of Asia-Pacific shares outside Japan up 0.4%.
South Korea's Kospi stood out with a 1% jump, while Vietnamese shares traded near a record high.
Data today from the region's two biggest economies showed resilience in their service sectors in the face of headwind from Trump's chaotic introduction of tariffs on goods from trading partners.
In Japan, the S&P Global final services purchasing managers' index (PMI) climbed to 53.6 in July from 51.7 in June for the strongest expansion since February.
China's services activity last month expanded at its fastest pace in more than a year.
A slew of PMIs for July are due for release today across Europe.
In earnings, the second-quarter US results season is winding down, but investors are still looking forward to reports this week from big names including Walt Disney and Caterpillar.
Equity futures are pointing to gains in European and US. markets, with the pan-region Euro Stoxx 50 futures up 0.13% and the S&P 500 e-minis rising 0.14%.
Key developments that could influence markets today include France's industrial output for June; July purchasing managers' indexes in France, Germany, the euro zone, and Britain; European earnings (Diageo, BP, Deutsche Post, and Telecom Italia); and US earnings (Caterpillar, Pfizer, Yum! Brands, Marriott International, and Fox Corp).
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Malay Mail
29 minutes ago
- Malay Mail
Ageing gracefully in Malaysia: How to plan your finances and medical care with 'living wills', trusts, POAs and more
Financial planning experts at a Bar Council forum urged Malaysians to plan early for ageing and set up a 'Plan B', including buying healthcare insurance while younger. Malaysians should be careful if they are using a Power of Attorney to prepare for their daily care or financial needs, since it can be revoked if they become mentally incapacitated. Experts also suggested Malaysia explore long-term care insurance, as seen in Japan and the Netherlands, with the 13th Malaysia Plan mentioning this as a possible future policy direction. KUALA LUMPUR, Aug 7 — Always wanted to grow older 'gracefully' in Malaysia and have your financial arrangements all sorted out? Speaking at the recent 'Twilight Talks' forum organised by the Bar Council's MyBar Ageing Rights Advisory Committee, financial planning experts said you should plan even when you are younger, and to always have a 'Plan B' to prepare for any future possibilities. Datuk Raymond Wong, a 69-year-old certified financial planner and founder of Kensington Trust Group, said he began his journey of 'positive ageing' or 'ageing gracefully' after he became a cancer survivor recently and after his mid-60s client remarked that both of them were in the 'final quarter of our life in this world'. Here are some tips that he had to share: Buy your own insurance for hospitalisation when young He cautioned that you should not rely on your company's group insurance for hospitalisation or critical illnesses. This is since it only covers company employees up to the ages of 65 or 70, and those beyond those ages can no longer benefit from this insurance. 'When I was 40, 50, running a business, we were covered by group hospitalisation or group critical illness. It never occurred to me that I will get sick or hospitalised by the time I'm 60 or 70,' the chartered accountant said when sharing his personal experience at a forum on ageing organised by the Malaysian Bar. If you try to buy medical insurance much later to cover potential hospitalisation needs for the critical period when you need it the most (such as ages 65 to 90), Wong said insurers could decline to provide insurance for your existing illnesses and also charge a higher premium due to your age. Setting up a 'Plan B', such as a trust Since he cannot go back in time to get medical insurance at an earlier age, Wong now plans to set up a medical trust for himself, where his trustee will know how to take care of his needs financially when he reaches ages such as 80. Even if you think you have enough savings for say, the next 10 years, setting up a trust in advance could help if you unexpectedly become mentally incapacitated or physically incapacitated later on. Wong stressed the importance of planning earlier for a Plan B or setting up trusts: 'It's something you need to plan, and don't be too late, and then when it happens to you, the infrastructure below you is not there to support you.' Taking it one step at a time Wong said he and his wife are planning for a future where they would not be relying on their children, and also noted that 'life still needs to go on' in the event either spouse is no longer around. 'And that's how we need to plan, that will not change, because you need to take it in bite-sized stages, from age 60 to 70; 70 to 80; 80 to 90; if we are blessed to live that long in that sense.' He said the reality of life is that children would eventually spend less and less time with their parents as they have their own families, and said there is a need for a 'mindset' shift in making future plans. 'So I have told my wife, we have countless discussions on this. We assume that both of us will be alone to take care of each other, that is what we call zero-based assumption. 'Doesn't mean that my children are not loyal or filial or whatever you name it, it's just the tendency nowadays is not to burden them, but at the same time you need to have the ability to take care of yourself,' he said. Saying that there is no 'textbook' for ageing gracefully, Wong said: 'But a general way of looking at it would be positive ageing — always a firm belief that you will grow older and expect to live longer than what you think you can do.' Linnet Lee, former CEO of the Financial Planning Association of Malaysia, at the same forum encouraged Malaysians to start financial planning earlier instead of waiting until retirement. 'So the rule of thumb is, if you think you are going to retire in 25 years, you must start 25 years before,' she said. She stressed the importance of having savings as it would help in financial planning for retirement, saying it would be virtually impossible to retire without working with zero savings 'So it's either you live within your means or you work longer; or even better you live within your means and you work longer, you have to do both,' she said, earlier acknowledging that some might not be in good health to be able to work longer. Trevor Jason Mark Padasian, a member of the Bar Council's MyBar Ageing Rights Advisory ommittee, stresses that a power of attorney will automatically be cancelled if the person making it becomes mentally incapacitated or is later diagnosed to have a mental disorder. — Picture by Raymond Manuel Have your pick: Wills, trust, POAs Speaking at the same forum, lawyer Trevor Jason Mark Padasian outlined the available options in Malaysia for financial planning: Writing a will Trusts Creating a Power of Attorney (POA) For example, you (donor) can create a POA to authorise or give a person (donee) the power to look after you and your day-to-day care, or sell your properties to look after you. But Trevor warned that many people are caught by surprise when the POA is automatically revoked, when the person who created the POA is later diagnosed to be mentally incapacitated (such as when they have illnesses such as schizophrenia or dementia). So even if you may have created a POA for future situations where you become mentally incapacitated or become unable to manage your own affairs, the POA will become invalid and become a useless document. Other situations when your POA becomes revoked in Malaysia are: if you give written notice of the revocation, or if you die, if you become bankrupt and the court makes a receiving order against you; or if the person you authorised has renounced the POA, or has become of unsound mind, or dies. There are countries where they have a type of POA that will still be valid even if the person who created it becomes mentally incapacitated, known sometimes as an Enduring Power of Attorney (Australia, Hong Kong) or Lasting Power of Attorney (UK, Singapore). But Trevor said Malaysia does not yet have laws that enable an enduring POA, so it is not an option that you can use here. If it is found in court that you have become mentally incapacitated or unable to manage yourself and your own affairs, the court can order the appointment of either a Committee of Person or Committee of Estate to take on that role. What about 'Living Wills'? Trevor said 'living wills' or 'Advance Care Directives' are not legally binding in Malaysia and could potentially be challenged in court, and there are no laws or regulations on this yet. But he said that the 'living will' option is widely used in Malaysia, and doctors generally do respect these advance care directives. Normally, a 'will' deals with a person's assets and how it will be distributed after their death. But a 'living will' is when a person makes decisions and gives instruction on their own future medical care, in case they become incapable of making decisions or if they lose their mental cognition. Citing the Malaysian Medical Council's guidelines on this topic, Trevor said patients could write a directive to say they do not want certain medical treatments. But he said the directive will become invalid if it gives instructions for illegal activities such as euthanasia or termination of a pregnancy. Global Coalition on Ageing advisory council member Nathan Vytialingam said Malaysia could consider having a 'long-term care insurance'. — Picture by Raymond Manuel Should Malaysia have 'Long-Term Care Insurance'? In a separate session at the forum, Global Coalition on Ageing advisory council member Nathan Vytialingam listed best practices from Sweden, Denmark, Japan, Australia, the Netherlands, and Singapore which he said Malaysia could adapt or be inspired for its own ageing population. Nathan said Malaysia could introduce a 'long-term care insurance' for financial sustainability, with this being a mandatory insurance in both Japan (mandatory for all aged 40 and above) and the Netherlands. In yet another session at the forum, the Department of Social Welfare's elderly division's principal assistant director Mohd Mahir Mohd Tahir said the government looks at various aspects tied to ageing. 'And we are now heading towards the direction of looking at long-term care insurance which are carried out in several countries, in Japan especially, where we contribute from an early stage at 40 years old for our needs at ages 60 and above,' he said. The 13th Malaysia Plan, which is Malaysia's development plan for the next five years and which was tabled in Parliament on July 31, had briefly mentioned that a "long-term care insurance scheme will be explored to provide a more structured and sustainable protection".
The Star
an hour ago
- The Star
Wall St ends higher with Nasdaq up over 1%
The Dow rose 81.38 points, or 0.18%, to 44,193.12, the S&P 500 gained 45.87 points, or 0.73%, to 6,345.06 and the Nasdaq gained 252.87 points, or 1.21%, to 21,169.42. NEW YORK: US stocks ended higher on Wednesday, led by a more than 1% gain in the Nasdaq, as Apple shares climbed after news of its plans to announce a domestic manufacturing pledge, and as some companies delivered upbeat earnings reports. Shares of Apple jumped 5.1% and provided the biggest boost to all three of the major indices after a White House official said the company would announce a US$100-billion domestic manufacturing pledge. In addition, shares of McDonald's rose 3% after the fast-food restaurant's affordable menu drove global sales past expectations, while Arista Networks shares jumped 17.5% after the cloud networking company projected current-quarter revenue above estimates. "Earnings continue to come in better than expected," said Sam Stovall, chief investment strategist at CFRA Research. He said while there is uncertainty surrounding tariffs, investors appear to be upbeat about the near term. Results are now in from about 400 of the S&P 500 companies for the second-quarter earnings season. About 80% of reports are beating analyst earnings expectations – above the 76% average of the last four quarters – and earnings growth for the quarter is estimated at 12.1%, up from 5.8% at the start of July, according to LSEG data. On Wednesday, US President Donald Trump imposed an additional 25% tariff on Indian goods, citing New Delhi's continued imports of Russian oil. The Dow Jones Industrial Average rose 81.38 points, or 0.18%, to 44,193.12, the S&P 500 gained 45.87 points, or 0.73%, to 6,345.06 and the Nasdaq Composite gained 252.87 points, or 1.21%, to 21,169.42. Also positive for stocks were increasing bets for a September interest rate cut from the Federal Reserve. Last week's jobs report showed slowing employment growth and downward revisions for previous months. Minneapolis Fed president Neel Kashkari said on Wednesday the Fed may need to cut rates in the near term to account for a slowing economy. Market expectations for a September rate cut of at least 25 basis points from the Fed stood at 95.2%, up from 92.9% in the prior session and well above 46.7% from a week ago, according to CME's FedWatch Tool. Investors also awaited Trump's choice to fill a slot on the Fed's Board of Governors. Bucking the day's trend, shares of chip company Advanced Micro Devices and server maker Super Micro Computer fell sharply after the companies posted disappointing results in their data center segments. Advanced Micro was down 6.4% and Super Micro was down 18.3%. Walt Disney delivered a strong quarter and lifted its full-year outlook, but its shares eased 2.7%. Advancing issues outnumbered decliners by a 1.12-to-1 ratio on the NYSE. There were 166 new highs and 76 new lows on the NYSE. On the Nasdaq, 2,195 stocks rose and 2,377 fell as declining issues outnumbered advancers by a 1.08-to-1 ratio. Volume on US exchanges was 16.85 billion shares, compared with the 18.27-billion average for the full session over the last 20 trading days. — Reuters
The Star
an hour ago
- The Star
Oil slides as US-Russia talks stir sanction uncertainty
Brent crude futures fell 75 cents, or 1.1%, to settle at US$66.89 a barrel, while US West Texas Intermediate crude dropped 81 cents, or 1.2%, to settle at US$64.35. NEW YORK: Oil prices slid about 1% to an eight-week low on Wednesday after US President Donald Trump's remarks about progress in talks with Moscow created uncertainty on whether the US would impose new sanctions on Russia. Brent crude futures fell 75 cents, or 1.1%, to settle at US$66.89 a barrel, while US West Texas Intermediate crude dropped 81 cents, or 1.2%, to settle at US$64.35. Those moves marked a fifth consecutive day of losses for both crude benchmarks, with Brent closing at its lowest since June 10 and WTI closing at its lowest since June 5. Trump said on Wednesday that his special envoy Steve Witkoff made "great progress" in his meeting with Russian President Vladimir Putin, as Washington continued its preparations to impose secondary sanctions on Friday. Trump has threatened additional sanctions on Moscow if no moves are made to end the war in Ukraine. "Everyone agrees this war must come to a close, and we will work towards that in the days and weeks to come," Trump said, without providing further details. Russia is the world's second-biggest producer of crude after the US, so any potential deal that would reduce sanctions would make it easier for Russia to export more oil. Earlier in the day, oil prices rose after Trump issued an executive order imposing an additional 25% tariff on goods from India, saying it directly or indirectly imported Russian oil. The new import tax will go into effect 21 days after August 7. India, along with China, is a major buyer of Russian oil. "For the time being, the 21-day start to the new Indian tariffs, while Russia tries to put together some kind of cease fire agreement ahead of President Trump's August 8 deadline, still leaves too much uncertainty around the situation," Bob Yawger, director of energy futures at Mizuho, said in a note. In addition to the tariff and sanction uncertainty, analysts said a planned Opec+ supply increase has weighed on the market in recent days. Indian Prime Minister Narendra Modi, meanwhile, will visit China for the first time in over seven years, a government source said on Wednesday, in a further sign of a diplomatic thaw with Beijing as tensions with the US rise. In other news, Saudi Arabia, the world's biggest oil exporter, on Wednesday hiked its September crude oil prices for Asian buyers, the second monthly rise in a row, on tight supply and robust demand. Oil markets found support earlier in the day from a bigger-than-expected decline in US crude inventories last week. The US Energy Information Administration said energy firms pulled 3 million barrels of crude from inventories during the week ended August 1. That was much bigger than the 0.6-million-barrel draw analysts forecast in a Reuters poll, but was smaller than the decline of 4.2 million barrels that market sources said the American Petroleum Institute trade group cited in its figures on Tuesday. — Reuters
