Bloomberg Daybreak: Asia Edition Fed's Jackson Hole Shift Fuels Gains in Asia
9 snips
Aug 25, 2025 Matt Orton, Head of Advisory Solutions at Raymond James, and Qian Wang, Chief Asia Pacific Economist at Vanguard, dive into the market's reaction to Jerome Powell's potential interest rate cuts. They discuss how Asian equities are buoyed by Wall Street's rally, with Japan and South Korea seeing gains. Qian addresses the concerns overshadowing Chinese stocks, including trade tariffs and a looming property crisis, while hinting at the risk of a market bubble. They highlight the impact of U.S. economic policies on investor sentiment across Asia.
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Powell Shifted The Fed Focus To Jobs
- Jerome Powell's Jackson Hole remarks shifted market focus from inflation to employment and opened the door to a September rate cut.
- Markets now weigh payrolls and labor data far more heavily than upcoming PCE inflation readings.
Prioritize Payrolls And Tech Earnings
- Watch US non-farm payrolls (Sept 5) as the primary data point for Fed cut odds rather than this week's PCE print.
- Use upcoming tech earnings, especially NVIDIA, to assess whether the risk-on rally can sustain into year-end.
Short Squeezes Fueled The Rally
- Friday's rally included meaningful short squeezes, especially in small caps, homebuilders and regional banks.
- Lower-rate expectations amplified squeeze dynamics across highly shorted and rate-sensitive names.