Key Points

• Asia Stocks Rally on Fed Cut Bets as South Korea Hits Record High: Regional equities advanced with new highs in Japan, South Korea, and Singapore, while China’s deflation underscored weak domestic demand.
• European Stocks Gain as Inflation Data and Oil Risks Dominate Focus: Markets rose ahead of U.S. inflation prints, with investors weighing the scale of Fed cuts, Middle East tensions lifting oil, and Fitch set to review France’s rating.
• Retail Access to Private Markets Expands, but Risks Loom Large: New U.K. funds signal momentum in democratizing private assets, though liquidity constraints, fees, and opacity raise investor risk concerns.
• Oracle Soars on Massive Cloud Backlog Despite Earnings Miss: Shares spiked 29% on $455B in booked cloud revenue, with analysts calling the surge transformative for OCI’s AI-driven growth trajectory.

Asia Stocks Rally on Fed Cut Bets as South Korea Hits Record High

Asian equities advanced Wednesday, mirroring Wall Street’s gains, as investors priced in higher odds of a Federal Reserve rate cut. South Korea’s Kospi rose 1.7% to a record high, Japan’s Nikkei gained 0.9% to an all-time peak, and Singapore’s Straits Times also set a new record. China’s CSI 300 edged higher despite consumer prices falling 0.4% year-on-year, a deeper decline than expected, while producer prices remained in deflation.

Tech shares gained across the region, supported by Apple’s supply chain, though Apple’s own stock slipped after its product launch. U.S. futures were modestly higher ahead of key inflation data.

European Stocks Gain as Inflation Data and Oil Risks Dominate Focus

European equities advanced Wednesday, with the DAX up 0.5% and the CAC 40 rising 0.4%, tracking Wall Street’s record-setting session as investors awaited U.S. inflation readings that could shape the Fed’s September rate decision. Markets are weighing whether incoming data will justify a standard 25-basis-point cut or a larger move.

China’s deflationary data underscored weak global demand, while in Europe, Macron appointed Sebastien Lecornu as prime minister to steer budget negotiations ahead of Fitch’s rating review.

Corporate updates included Inditex’s softer sales, Novo Nordisk’s 9,000 job cuts, and Oracle’s bullish cloud outlook. Brent crude climbed 1% on Middle East tensions and Russian supply concerns.

Retail Access to Private Markets Expands, but Risks Loom Large

European efforts to broaden retail access to private markets gained traction this week with Hargreaves Lansdown and Schroders Capital launching new long-term asset funds offering exposure to private equity, credit, and infrastructure. Supporters highlight diversification and long-term growth benefits, while regulators argue these vehicles could help channel capital toward decarbonization and industrial revival.

Yet concerns persist over liquidity, transparency, and complex fee structures, particularly in volatile markets. The rise of semi-liquid “evergreen” funds underscores demand for flexible alternatives, but analysts warn that retail investors face heightened risks if illiquidity premia compress or credit conditions worsen.

Oracle Soars on Massive Cloud Backlog Despite Earnings Miss

Oracle shares surged 29% in premarket trading after the company unveiled a record $455 billion in booked cloud revenue, far surpassing expectations and offsetting weaker-than-forecast fiscal Q1 earnings. The backlog, boosted by $317 billion of new deals in the quarter, positions Oracle as a major growth story in enterprise cloud, with management forecasting half-a-trillion in Oracle Cloud Infrastructure orders and multibillion-dollar contracts still to come.

Analysts highlighted the acceleration as transformative, projecting OCI revenue to grow 77% this year and quadruple by 2029, a trajectory that underscores robust AI-driven demand and spillover benefits for hardware partners like Nvidia.

Conclusion

Markets continue to reflect a delicate balance between optimism fueled by policy expectations and innovation, and caution over structural risks.

Asia’s rally highlighted investor confidence in Fed rate cuts, though China’s persistent deflation signals lingering headwinds.

In Europe, equities gained but face looming tests from inflation data, sovereign ratings, and geopolitical risks that are driving oil higher. Expanding retail access to private markets underscores a broader trend toward democratization of alternative assets, though liquidity and transparency concerns remain.

Meanwhile, Oracle’s cloud backlog positions it as a standout AI-driven growth story, reinforcing the transformative role of technology in global markets.

Investment Insights

• Asian equity momentum highlights opportunities in Japan, South Korea, and Singapore, but China’s deflationary trend warrants caution in mainland exposure.
• Upcoming U.S. inflation data is pivotal for rate expectations; a hotter print could disrupt Fed cut bets and weigh on equities and bonds.
• Retail access to private markets offers diversification potential but poses liquidity and transparency risks—allocations should remain limited within broader portfolios.
• Oracle’s blockbuster cloud backlog reinforces AI infrastructure as a high-conviction theme, with beneficiaries extending beyond software to semiconductor suppliers and data center ecosystem partners.

Economic Calendar