{"id":65129,"date":"2025-09-15T08:56:09","date_gmt":"2025-09-15T08:56:09","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/65129\/"},"modified":"2025-09-15T08:56:09","modified_gmt":"2025-09-15T08:56:09","slug":"fed-cut-in-focus-as-em-tech-buybacks-drive-markets","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/65129\/","title":{"rendered":"Fed Cut in Focus as EM Tech, Buybacks Drive Markets"},"content":{"rendered":"<p><b>Analyst Weekly September 15, 2025<\/b><\/p>\n<p>From EM tech strength to record US buybacks, market drivers are stacking up ahead of the Fed\u2019s first rate cut of 2025. With US growth still uneven and inflation expectations anchored, Powell is expected to deliver a 25 bp cut this week, but markets will be watching his guidance on the pace of further easing just as closely.<\/p>\n<p>Tech is the New EM Engine<\/p>\n<p><a href=\"https:\/\/www.etoro.com\/markets\/eem\" rel=\"nofollow noopener\" target=\"_blank\">Emerging markets <\/a>(EM) have often been seen as volatile and hard to navigate, but the latest earnings season suggests things may be turning a corner.\u00a0 While overall EM earnings growth was flat in Q2, the breadth of earnings revisions is improving for the first time in months, especially in Asia, thanks to tech strength and supportive policy moves.<\/p>\n<ul>\n<li aria-level=\"1\"><b>Semis lead the pack:<\/b> The standout theme is technology. Companies tied to the global AI cycle are fueling earnings upgrades. Taiwan and South Korea, both tech-heavy markets, delivered solid profit growth thanks to strong demand for advanced chips. Taiwan\u2019s <a href=\"https:\/\/www.etoro.com\/markets\/TSM\" rel=\"nofollow noopener\" target=\"_blank\">TSMC<\/a> and Korea\u2019s SK Hynix are clear beneficiaries, with leadership in areas like AI accelerators and high-bandwidth memory.<\/li>\n<li aria-level=\"1\"><b>Internet shake-up:<\/b> China\u2019s big e-commerce firms like <a href=\"https:\/\/www.etoro.com\/markets\/9988.HK\" rel=\"nofollow noopener\" target=\"_blank\">Alibaba<\/a>, <a href=\"https:\/\/www.etoro.com\/markets\/9618.HK\" rel=\"nofollow noopener\" target=\"_blank\">JD<\/a>, and <a href=\"https:\/\/www.etoro.com\/markets\/03690.HK\" rel=\"nofollow noopener\" target=\"_blank\">Meituan<\/a> remain under pressure from intense competition, especially in food delivery and quick commerce. However, Alibaba\u2019s cloud and international businesses are helping offset domestic challenges. Meanwhile, ASEAN internet firms such as <a href=\"https:\/\/www.etoro.com\/markets\/GRAB\" rel=\"nofollow noopener\" target=\"_blank\">Grab<\/a> and <a href=\"https:\/\/www.etoro.com\/markets\/SE\" rel=\"nofollow noopener\" target=\"_blank\">Sea <\/a>are thriving. They\u2019re showing strong user growth, resilient profitability, and expanding into fintech and digital services. For investors looking at long-term structural growth in EM, this is a key theme: the digital economy is alive and well outside of China.<\/li>\n<li aria-level=\"1\"><b>Financials Regaining Strength:<\/b> Another bright spot is financials. Chinese banks (like <a href=\"https:\/\/www.etoro.com\/markets\/3968.HK\" rel=\"nofollow noopener\" target=\"_blank\">China Merchants Bank<\/a>, <a href=\"https:\/\/www.etoro.com\/markets\/3988.HK\" rel=\"nofollow noopener\" target=\"_blank\">\u00a0Bank of China<\/a>) saw profits rebound in Q2, helped by higher fee income. Indian and Brazilian banks also reported resilient results, with names like <a href=\"https:\/\/www.etoro.com\/markets\/IBN\" rel=\"nofollow noopener\" target=\"_blank\">ICICI Bank<\/a> and <a href=\"https:\/\/www.etoro.com\/markets\/ITUB\" rel=\"nofollow noopener\" target=\"_blank\">Itau Unibanco<\/a> highlighted as well-positioned leaders. Strong capitalization and steady loan growth make them standouts in regions that are still under-owned by global investors. For retail clients, this means the financial sector, long a backbone of EM indices, is regaining relevance as a driver of steady returns.<\/li>\n<li aria-level=\"1\"><b>Watch position sizes &amp; FX Risk: <\/b>EM moves can be sharp, pacing exposure helps manage swings\u2013 broad EM or Asia ex-Japan ETFs help smooth out country-specific shocks. Pair EM tech\/financials with exposure to gold (a classic EM hedge) or developed markets. To eliminate currency risk, investors can invest in a currency hedged equity ETF; exchange-traded currency (ETCs); or through CFDs or spread bets.<\/li>\n<\/ul>\n<p><b>Investment Takeaway:<\/b> Emerging markets may look dull on the surface, but momentum is quietly building. Tech is thriving, banks are stabilizing, and policy support is boosting domestic demand. The feared \u201ctariff shock\u201d from US trade policy has been less severe than expected, giving exporters some breathing room. AI and tech cycles remain a global resilience factor, helping offset weak spots like consumer staples. Opportunities are broadening from Taiwan semis to Indian banks to Southeast Asian internet platforms. With valuations still cheap and growth picking up along with Fed rate cuts, EM exposure could be a way to balance portfolios tilted heavily toward US mega-caps.<\/p>\n<p>Big Buybacks, Bigger Impact<\/p>\n<p>US companies are buying back stock at record levels in 2025. Nearly $1 trillion in buyback announcements have been made so far this year, putting 2025 on pace to surpass last year\u2019s total. Tech giants are leading the way;\u00a0 <a href=\"https:\/\/www.etoro.com\/markets\/AAPL\" rel=\"nofollow noopener\" target=\"_blank\">Apple<\/a> ($100B), <a href=\"https:\/\/www.etoro.com\/markets\/GOOG\" rel=\"nofollow noopener\" target=\"_blank\">Google <\/a>($70B), and <a href=\"https:\/\/www.etoro.com\/markets\/NVDA\" rel=\"nofollow noopener\" target=\"_blank\">Nvidia<\/a> ($60B) all unveiled massive buyback programs this earnings season. <a href=\"https:\/\/www.etoro.com\/smartportfolios\/thebigbanks?period=ThreeMonthsAgo&amp;hasavatar=true&amp;verified=true&amp;copyblock=false&amp;isfund=true&amp;fundtype=1,2,3&amp;copiersmin=2&amp;copiersgainmin=0&amp;sort=-copiers&amp;page=4&amp;pagesize=20&amp;preset=global_portfolios_popular\" rel=\"nofollow noopener\" target=\"_blank\">Big banks<\/a> like <a href=\"https:\/\/www.etoro.com\/markets\/JPM\" rel=\"nofollow noopener\" target=\"_blank\">JPM <\/a>($50B), <a href=\"https:\/\/www.etoro.com\/markets\/GS\" rel=\"nofollow noopener\" target=\"_blank\">GS <\/a>($40B), <a href=\"https:\/\/www.etoro.com\/markets\/WFC\" rel=\"nofollow noopener\" target=\"_blank\">WFC<\/a> ($40B), and <a href=\"https:\/\/www.etoro.com\/markets\/BAC\" rel=\"nofollow noopener\" target=\"_blank\">BAC<\/a> ($40B) have also committed tens of billions each.<\/p>\n<p>For investors, buybacks matter because they reduce the number of shares in circulation. That can boost earnings per share, provide price support, and signal that management is confident in the company\u2019s future. But the activity is highly concentrated \u2013\u00a0 a handful of mega-caps represent about 66% of all buybacks this year. For retail portfolios tilted toward <a href=\"https:\/\/www.etoro.com\/smartportfolios\/bigtech\" rel=\"nofollow noopener\" target=\"_blank\">tech<\/a> and <a href=\"https:\/\/www.etoro.com\/markets\/xlf\" rel=\"nofollow noopener\" target=\"_blank\">financials<\/a>, that concentration means buybacks could play an outsized role in driving returns.<\/p>\n<p>VIX Slips as Markets Stay Pinned<\/p>\n<p>Volatility keeps grinding lower (14.76), with the VIX sliding as key economic data passes without sparking major swings. Market focus has shifted more toward signs of labor market weakness than inflation, while the backdrop of possible stagflation, slower growth alongside sticky prices, remains part of the conversation. AI-related stocks beyond the \u201cMag 7\u201d have been a bright spot, helping sentiment stabilize.<\/p>\n<p>Still, dealer positioning into month-end suggests rallies are sold into and pullbacks are bought, keeping the <a href=\"https:\/\/www.etoro.com\/markets\/SPX500\" rel=\"nofollow noopener\" target=\"_blank\">S&amp;P 500<\/a> range-bound. Once September options and quarter-end expirations are behind us, the market could trade more freely, though corporate buyback blackouts may remove a layer of support. With volatility low, some investors are eyeing October as a good window to add protection with strategies such as QQQ put spread collars \u2013 which cap upside in exchange for cheaper downside protection \u2013 drawing increased attention.<\/p>\n<p>South Korean Stocks With Dynamic Recovery<\/p>\n<p>The EWY (iShares MSCI South Korea ETF) ended last week with a 7% gain at 78.66 points. In the long term, there is still catching up to do compared to the U.S. and European stock markets. The last record high was reached at the end of 2020 at 96.20 points. The gap has now narrowed to 18%. In the medium term, investors have increasingly turned back to South Korean stocks. Since the low in April, the index has risen 62%, while the S&amp;P 500 gained only 37% over the same period. From a technical perspective, EWY could continue its recovery in the coming weeks and months \u2013 at least as long as the support zone between 70.96 and 69.59 points (Fair Value Gap) holds.<\/p>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone size-full wp-image-1132867\" src=\"https:\/\/www.europesays.com\/ie\/wp-content\/uploads\/2025\/09\/AW-20250915-Chart1.png\" alt=\"EWY in the weekly chart\" width=\"1600\" height=\"616\"  \/><\/p>\n<p>EWY in the weekly chart. Source: eToro<\/p>\n<p>Cloud Business Triggers a Surge in Oracle Shares<\/p>\n<p>Oracle\u2019s stock skyrocketed last week, gaining over 25%. Strong cloud deals fueled a massive order boom. In just one quarter, several multibillion-dollar contracts were signed, including with OpenAI, Nvidia, and TikTok. The order backlog surged to $455 billion \u2014 more than four times the previous year\u2019s level. On the risk side, Oracle faces extremely high investments, which put pressure on cash flow and margins. In addition, there is a strong dependence on a few major customers.<\/p>\n<p>The market was heavily overbought at times, but conditions have since eased somewhat. Investors should watch the reactions in the two Fair Value Gaps created by the rally: between $241 and $296, and between $219 and $234. Bullish reversal signals in these zones could indicate that a new upward move is about to begin.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-1132893\" src=\"https:\/\/www.europesays.com\/ie\/wp-content\/uploads\/2025\/09\/AW-20250915-Chart2.png\" alt=\"Oracle in the daily chart\" width=\"1600\" height=\"612\"  \/><\/p>\n<p>Oracle in the daily chart. Source: eToro<\/p>\n<p>Macro Calendar: All Eyes on Powell<\/p>\n<p>The Fed is expected to cut interest rates on Wednesday for the first time this year (decision at 8:00 p.m.). Weakness in the labor market gives the Fed the green light for a cut. A small step of 25 basis points to a range of 4.00 to 4.25 percent is expected. By the end of 2026, markets expect a total of six small cuts. Persistently high inflation could slow this pace. That\u2019s why the new quarterly projections from the central bank will be decisive. In June, the Fed projected core PCE inflation of 2.4% for 2026 and 2.1% for 2027. A downward revision would give stocks and bonds a boost. In addition, Jerome Powell\u2019s press conference at 8:30 p.m. could provide key guidance on what happens after the September meeting.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-1132919\" src=\"https:\/\/www.europesays.com\/ie\/wp-content\/uploads\/2025\/09\/AW-20250915-WeeklyPerformance.png\" alt=\"Weekly Performance and Calendar\" width=\"700\" height=\"528\"  \/><\/p>\n<p>This communication is for information and education purposes only and should not be taken as investment advice, a personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments.\u00a0 This material has been prepared without taking into account any particular recipient\u2019s investment objectives or financial situation and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past or future performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication.<\/p>\n<p>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"Analyst Weekly September 15, 2025 From EM tech strength to record US buybacks, market drivers are stacking up&hellip;\n","protected":false},"author":2,"featured_media":65130,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[175],"tags":[79,18,19,17,188],"class_list":{"0":"post-65129","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-business","9":"tag-eire","10":"tag-ie","11":"tag-ireland","12":"tag-markets"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/65129","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=65129"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/65129\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/65130"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=65129"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=65129"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=65129"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}