Asia Market Quick Take – August 14, 2025

Key points:

• Macro: Bessent suggests a 1.5-point Fed rate cut
• Equities: US stocks reach new record high; Tencent ADR gains 7.4% after earnings
• FX: USD weakens; 25bps Fed rate cut anticipated, Dollar Index 97.80
• Commodities: Oil near a two-month low as the IEA predicted record oversupply
• Fixed income: Front-end gains followed Scott Bessent's dovish remarks

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Disclaimer: Past performance does not indicate future performance.

Macro:

• Treasury Secretary Scott Bessent suggests the Fed’s rate should be 1.5 percentage points lower. He said a cut might have been considered with recent labor data, and there are 10 or 11 candidates to succeed Chair Jerome Powell in May.
• Treasury Secretary Scott Bessent announced that U.S. trade officials will reconvene with Chinese counterparts within two to three months to discuss economic relations. This follows a 90-day extension of their tariff truce, preventing significant duties on bilateral goods.
• Chinese officials announced loan interest subsidies for personal and service sector loans to enhance consumption, a crucial economic driver. This initiative aims to stimulate spending and promote economic growth.

Equities: 

• US- US stocks rose on Wednesday, fueled by expectations of a Federal Reserve rate cut in September. The S&P 500 gained 0.3% and the Nasdaq increased 0.1%, with both briefly reaching record highs, while the Dow added 463 points. This rally followed Tuesday's rise due to lower-than-expected inflation data, prompting bets on monetary easing. Materials, healthcare, and consumer cyclicals led sector gains. AMD jumped 5.4% and Paramount Skydance soared 36.7%, while Nvidia, Alphabet, and Microsoft saw slight declines. Brinker International climbed 1.5% after surpassing profit expectations, but Cava dropped 16.6% following a reduced sales forecast.
• EU - European stocks surged on Wednesday, reaching a two-week high, boosted by prospects of lower US interest rates and falling energy prices. The STOXX 50 rose 1% to 5,390 and the STOXX 600 climbed 0.6% to 551. Banks, luxury goods, and tech sectors led gains with strong performances from Intesa Sanpaolo, LVMH, Kering, SAP, and Prosus. Healthcare also rallied; Sanofi rose 2%, Bayer increased 3.5%, and AstraZeneca jumped 3%. Oil producers like TotalEnergies fell about 1% due to signals of global surpluses from the IEA and possible de-escalation in Ukraine ahead of a planned summit between Presidents Trump and Putin.
• HK - Hang Seng Index rose 2.6% to 25,614, its highest in two weeks and biggest one-day gain since May. All sectors advanced, driven by China's plan to subsidize consumer loan interest and a prolonged US-China tariff truce. The Shanghai index reached a 3.5-year high. Tencent Music surged 15.6% on strong earnings, MMG increased 10.4% on solid H1 results, HSBC hit a 17-year peak, and WH Group rose 6.2% to a five-year high. Tencent's Q2 revenue grew 15%, supported by strong gaming and AI investments. In Q1 2025, revenue reached 184.504 billion yuan, up from 161.117 billion yuan last year. Domestic games revenue rose 17%, fueled by "Delta Force" and popular titles.
• SG - Straits Times Index rose 1.2% to 4,272.76. City Developments Limited led gains, rising 7.1% to S$6.80, while Wilmar International fell 1% to S$2.94 despite a profit increase. The three local banks also gained, with DBS up 1% to S$51.45, UOB rising 0.9% to S$36.19, and OCBC 0.4% higher at S$16.81.

Earnings this week:

• Thursday: JD.com (JD), Applied Materials (AMAT), John Deere (DE), SOMPO (9630JP), NetEase (9999), Tapestry (TPR)
• Friday: Flowers Foods (FLO), Alibaba (9988HK), Sands China (1928HK)