Analyst Weekly September 15, 2025
From EM tech power to file US buybacks, market drivers are stacking up forward of the Fed’s first fee lower of 2025. With US progress nonetheless uneven and inflation expectations anchored, Powell is predicted to ship a 25 bp lower this week, however markets shall be watching his steering on the tempo of additional easing simply as carefully.
Tech is the New EM Engine
Rising markets (EM) have usually been seen as unstable and laborious to navigate, however the newest earnings season suggests issues could also be turning a nook. Whereas general EM earnings progress was flat in Q2, the breadth of earnings revisions is bettering for the primary time in months, particularly in Asia, due to tech power and supportive coverage strikes.
Semis lead the pack: The standout theme is know-how. Corporations tied to the worldwide AI cycle are fueling earnings upgrades. Taiwan and South Korea, each tech-heavy markets, delivered stable revenue progress due to sturdy demand for superior chips. Taiwan’s TSMC and Korea’s SK Hynix are clear beneficiaries, with management in areas like AI accelerators and high-bandwidth reminiscence.
Web shake-up: China’s massive e-commerce companies like Alibaba, JD, and Meituan stay beneath stress from intense competitors, particularly in meals supply and fast commerce. Nevertheless, Alibaba’s cloud and worldwide companies are serving to offset home challenges. In the meantime, ASEAN web companies similar to Seize and Sea are thriving. They’re exhibiting sturdy consumer progress, resilient profitability, and increasing into fintech and digital companies. For buyers taking a look at long-term structural progress in EM, it is a key theme: the digital financial system is alive and effectively outdoors of China.
Financials Regaining Power: One other vibrant spot is financials. Chinese language banks (like China Retailers Financial institution, Financial institution of China) noticed income rebound in Q2, helped by larger price revenue. Indian and Brazilian banks additionally reported resilient outcomes, with names like ICICI Financial institution and Itau Unibanco highlighted as well-positioned leaders. Sturdy capitalization and regular mortgage progress make them standouts in areas which might be nonetheless under-owned by international buyers. For retail purchasers, this implies the monetary sector, lengthy a spine of EM indices, is regaining relevance as a driver of regular returns.
Watch place sizes & FX Danger: EM strikes could be sharp, pacing publicity helps handle swings– broad EM or Asia ex-Japan ETFs assist clean out country-specific shocks. Pair EM tech/financials with publicity to gold (a traditional EM hedge) or developed markets. To remove forex danger, buyers can spend money on a forex hedged fairness ETF; exchange-traded forex (ETCs); or by way of CFDs or unfold bets.
Funding Takeaway: Rising markets could look uninteresting on the floor, however momentum is quietly constructing. Tech is flourishing, banks are stabilizing, and coverage assist is boosting home demand. The dreaded “tariff shock” from US commerce coverage has been much less extreme than anticipated, giving exporters some respiration room. AI and tech cycles stay a worldwide resilience issue, serving to offset weak spots like client staples. Alternatives are broadening from Taiwan semis to Indian banks to Southeast Asian web platforms. With valuations nonetheless low cost and progress choosing up together with Fed fee cuts, EM publicity may very well be a strategy to steadiness portfolios tilted closely towards US mega-caps.
Massive Buybacks, Greater Affect
US firms are shopping for again inventory at file ranges in 2025. Almost $1 trillion in buyback bulletins have been made up to now this yr, placing 2025 on tempo to surpass final yr’s whole. Tech giants are main the best way; Apple ($100B), Google ($70B), and Nvidia ($60B) all unveiled large buyback applications this earnings season. Massive banks like JPM ($50B), GS ($40B), WFC ($40B), and BAC ($40B) have additionally dedicated tens of billions every.
For buyers, buybacks matter as a result of they scale back the variety of shares in circulation. That may increase earnings per share, present worth assist, and sign that administration is assured within the firm’s future. However the exercise is very concentrated – a handful of mega-caps symbolize about 66% of all buybacks this yr. For retail portfolios tilted towards tech and financials, that focus means buybacks might play an outsized position in driving returns.
VIX Slips as Markets Keep Pinned
Volatility retains grinding decrease (14.76), with the VIX sliding as key financial knowledge passes with out sparking main swings. Market focus has shifted extra towards indicators of labor market weak spot than inflation, whereas the backdrop of attainable stagflation, slower progress alongside sticky costs, stays a part of the dialog. AI-related shares past the “Magazine 7” have been a vibrant spot, serving to sentiment stabilize.
Nonetheless, seller positioning into month-end suggests rallies are bought into and pullbacks are purchased, conserving the S&P 500 range-bound. As soon as September choices and quarter-end expirations are behind us, the market might commerce extra freely, although company buyback blackouts could take away a layer of assist. With volatility low, some buyers are eyeing October as a very good window so as to add safety with methods similar to QQQ put unfold collars – which cap upside in change for cheaper draw back safety – drawing elevated consideration.
South Korean Shares With Dynamic Restoration
The EWY (iShares MSCI South Korea ETF) ended final week with a 7% acquire at 78.66 factors. In the long run, there’s nonetheless catching as much as do in comparison with the U.S. and European inventory markets. The final file excessive was reached on the finish of 2020 at 96.20 factors. The hole has now narrowed to 18%. Within the medium time period, buyers have more and more turned again to South Korean shares. For the reason that low in April, the index has risen 62%, whereas the S&P 500 gained solely 37% over the identical interval. From a technical perspective, EWY might proceed its restoration within the coming weeks and months – at the very least so long as the assist zone between 70.96 and 69.59 factors (Honest Worth Hole) holds.
EWY within the weekly chart. Supply: eToro
Cloud Enterprise Triggers a Surge in Oracle Shares
Oracle’s inventory skyrocketed final week, gaining over 25%. Sturdy cloud offers fueled an enormous order increase. In only one quarter, a number of multibillion-dollar contracts had been signed, together with with OpenAI, Nvidia, and TikTok. The order backlog surged to $455 billion — greater than 4 instances the earlier yr’s stage. On the danger aspect, Oracle faces extraordinarily excessive investments, which put stress on money circulation and margins. As well as, there’s a sturdy dependence on just a few main prospects.
The market was closely overbought at instances, however circumstances have since eased considerably. Buyers ought to watch the reactions within the two Honest Worth Gaps created by the rally: between $241 and $296, and between $219 and $234. Bullish reversal indicators in these zones might point out {that a} new upward transfer is about to start.
Oracle within the day by day chart. Supply: eToro
Macro Calendar: All Eyes on Powell
The Fed is predicted to chop rates of interest on Wednesday for the primary time this yr (determination at 8:00 p.m.). Weak point within the labor market offers the Fed the inexperienced mild for a lower. A small step of 25 foundation factors to a spread of 4.00 to 4.25 % is predicted. By the top of 2026, markets count on a complete of six small cuts. Persistently excessive inflation might sluggish this tempo. That’s why the brand new quarterly projections from the central financial institution shall be decisive. In June, the Fed projected core PCE inflation of two.4% for 2026 and a pair of.1% for 2027. A downward revision would give shares and bonds a lift. As well as, Jerome Powell’s press convention at 8:30 p.m. might present key steering on what occurs after the September assembly.
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