Bloomberg Daybreak: Asia Edition Futures Mixed on Fed Rate Cut Hopes, Tepid US Eco Data
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Jun 5, 2025 Willem Sels, Global Chief Investment Officer at HSBC, delves into the market's reaction to disappointing U.S. economic data, emphasizing potential Federal Reserve rate cuts. David Bahnsen, Founder of the Bahnsen Group, discusses the implications of rising tariffs and economic uncertainty highlighted in the Fed's Beige Book. They explore investment strategies amidst these challenges, particularly focusing on emerging markets while analyzing the declining services sector and job creation, all while navigating a cautious economic landscape.
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US Growth Deceleration Without Recession
- The US economy is facing a growth deceleration but likely avoiding recession due to strong labor markets and corporate health.
- First quarter GDP was misleading, influenced by front-loaded imports, with the Atlanta Fed estimating current growth near 3.8%.
Soft vs Hard Economic Data Gap
- There is a gap between soft sentiment data and hard economic data, but it is narrowing.
- Services and technology growth de-correlate stock markets from manufacturing PMI, keeping stocks resilient despite weak manufacturing.
China's Domestic Market Resilience
- China's stock market is very domestically driven, with only a small fraction of revenues from US exports.
- Domestic stimulus and regional trade integration will continue to support China's economy amid global uncertainties.