Asian Stocks Track US Gains on Fed Rate Cut Bets: Markets Wrap

A Federal Reserve official has indicated that the central bank should not abandon the possibility of a rate cut in December, despite ongoing challenges in balancing inflation and unemployment. The Fed's dual mandate complicates decision-making, as raising rates can lower inflation but may lead to job losses, while cutting rates can reduce unemployment but potentially increase inflation.

US tech stocks, led by the Nasdaq, experienced their largest increase in six months, driven by growing expectations that the Federal Reserve will lower borrowing costs in December. This surge reflects a rebound in investor sentiment following recent volatility in the market.

Navan Inc. received renewed support from Wall Street, with analysts labeling the corporate-travel and expense platform as undervalued following a significant selloff after its $923.1 million IPO last month. This shift in sentiment comes as the company seeks to stabilize its market position amidst fluctuating investor confidence.

Jim Caron, CIO of Morgan Stanley Investment Management, stated on Bloomberg that the market is uncertain about the likelihood of a Federal Reserve rate cut in December, suggesting a 50/50 chance. This uncertainty follows mixed signals from economic indicators and employment data.

The Federal Reserve is facing challenges in convincing some banks to utilize the standing repo facility, a tool intended to enhance its control over short-term money markets. Despite the Fed's reassurances, concerns about the implications of using this facility persist among financial institutions.

Bitcoin and other cryptocurrencies have recently lost over $1 trillion in value, marking a significant downturn that has raised alarms among investors and rattled Wall Street. This decline is particularly notable as Bitcoin experienced its worst monthly performance since the 2022 crypto collapse, with a loss of approximately 25% in November.

Morgan Stanley strategist Michael Wilson expressed a bullish outlook for stocks in 2026, projecting the S&P 500 to reach 7,800. He emphasized the necessity for the Federal Reserve to implement rate cuts and highlighted the ongoing rally in AI stocks during an interview on Bloomberg Surveillance.

Morgan Stanley strategist Michael Wilson expressed concerns that the Federal Reserve is not acting swiftly enough in cutting interest rates, suggesting that further reductions are necessary. He anticipates a significant rally in the S&P 500, projecting it could reach 7,800 within a year, which is among the highest forecasts from Wall Street firms. Wilson shared these insights during an interview on Bloomberg Surveillance.