So, globally, the Reserve Bank Australia will meet on Tuesday and make an interest rate decision. And internationally, perhaps one of the most influential events this week will be the decision from the US Federal Reserve, which will be delivered on Thursday morning, Australian investors' time. And that almost certain reduction in interest rates is likely to have a market impact, no matter what happens more on that moment. Last week though, we did see some gains, both the ASX 200 and the S&P 500 were up around a quarter to a third of a percent.
Nothing startling, but at least it wasn't a red number. In contrast, Hong Kong was up almost 1% in trading. Last week showing that it has become the high beta market of the globe. When things are positive, Hong Kong is out performing on the upside.
When things are negative, it tends to feel the heat more. So, an interesting observation, particularly for traders who are looking for more volatile markets, given those high risk markets, there's potential for high rewards. The S&P 500 rallied again on Friday night. It's come back to within a whisker of its all-time highs.
And the rally was very broad based on Friday night. Across most of the sectors, it wasn't the glamour stocks leading away. This was evident sitting best as a spreading out across the market and diversifying their portfolios. I've not a bad decision in light of the strong out performance we've seen by some sectors.
We've also got some data this week that could be influential. Ahead of that US federal reserve meeting, the US jobs opening will be released on Tuesday night. And that, of course, speaks to activity in the economy and therefore potential interest rate decisions. But turning to the Fed, as I say, most influential event this week, full of markets globally, it's almost certain we'll get a cut because it was some doubt markets were starting to moving away from pricing near-term rate cuts.
And we saw the Fed respond. In fact, the chair of the New York Federal Reserve, who is thought to be very close to the chair, own pal of the main board, came up and in a speech given to a business community gathering, he said that he felt there was room for reduction in the near term. And that was taken as a very explicit hint that we'll see a reduction this week in US interest rates. Now, it's very important.
The market has already priced a quarter percent reduction in US cash rates. So anything different to that, although it's very unlikely, would have a huge market impact. If they were to cut rates by half a percent, it's likely I believe that we'd see a huge rally in US shares on the basis of the Fed is much more accommodated than the market had been pricing. And on the other hand, the Fed were to pass on a rate cut this week.
The impact would also be quite dramatic, but quite clearly negative. But I don't think we're going to see anything other than a 25 basis point reduction. What's much more likely to change market thinking is what the Fed governors, the 12 on the Fed open market committee, project for the next couple of years. Now, the consensus at the moment is we'll see a further 25 basis point reduction in 2026 in the US and then a further 25 basis point reduction in 2027.
In other words, modest interest rate cuts over the next two years. So anything that shows, and we're talking here about the dot plot, this is where the governor's projections are applauded for each of the major calendar events for the next three years. If those dot plots are widely spaced, it would be an indication of disagreement and uncertainty on the board. That could be a negative for markets.
And if there is a projection, any projections of rate rises over that period, that could also spark market reaction. So it's not just the decision itself on Thursday morning, it'll be the nuance that comes with the commentary, with the press conference that will follow the decision and with the dot plot that will be released after the meeting. Plenty to look out there for investors and traders. Turning to our watch list this week, we've got microchip technology on the radar.
And the reason for that is it's a rare beast. It's one of the very few semiconductors stopped where they could be a valuation argument. Now, valuations depend on projections into the future. So valuations themselves are not certainties.
But there are a number of analysts arguing that microchip technology is undervalued. They're valued by 23% last week. But that's because it did have some problems in previous years and had fallen from its all-time high. So the momentum has turned positive.
The company has also given a sales guide at the upper end of the previous guidance range. And this applies to about 12% year-on-year growth, a solid return to a growing environment. And the number of analysts have a buy rating here and arguing that the stock is currently trading at a discount and that's somewhere around 12% undervalued on some analysts' numbers. Microchip technology.
MCHP is the code if you want to have a look at that one. We also heard last week on Friday that Netflix is going to buy Warner Brothers. Now, this was a bit of a surprise. It was known that Warner Brothers was up for sale.
But Netflix was not considered a favorite contender to buy it. Yet, nonetheless, on Friday, we saw that announcement. Now, Netflix shares had been under pressure in the week leading up to this announcement. They were down almost 7% for the week.
About half of that though came after this deal was announced. Now, there are obviously some concerns about the digestion issues that will occur for Netflix and taking on Warner Brothers. It's a $72 billion deal. And it's not certain that there will be approval of this deal given the highly competitive, sorry, the high inventory that both bring to this in terms of the competition in the space.
So some concerns that might not receive approval. Between them, this group would have 33% of the US streaming market. And if the deal is successful, it would likely lead to buy ratings from plenty of analysts on that basis. But once again, that 33% of the streaming market might prove to be an impediment to getting this deal done.
And the last stock on our watch list this week is Whitehaven Coal. Now, it's not like we haven't talked about coal stocks for a long time, but in the Australian energy market, it appears that economic reality is starting to buy. It's very clear that with the data center demand and the idea that many of the state governments will be relying on investment in data centers to keep their economy sticking over, there simply isn't enough power under Australia's current energy policy settings to power these data centers. And so change must come.
And it appears with green hydrogen now a bus as a firming agent, gas and possibly nuclear energy come back on the table. Green coal is also a possibility. It does appear that the report we saw for Whitehaven Coal last week relates to the upcoming Northern Hemisphere winter. Whitehaven Coal up 13% last week.
And it's now up 26% year to date. It is currently conducting an on-market buyback. So it's returning shareholder value. And McCory have just put an outperform rating on the stock and looking for an increase in revenues in the second half of next year of more than 11%.
So a positive outlook for Whitehaven Coal. Clearly, the unpopularity of coal in the past has weighed on its share price. And once again, there's potentially a valuation argument, but interesting to see markets turning back towards the old school Whitehaven Coal. We want you to know that this podcast only includes general advice and does not take into consideration your objectives, the financial situation or needs.
Please think through any investing action you want to take and don't just rely on us, but speak with a professional advisor. The Daily Moon podcast is produced by the new Securities Australia, holder of Australian financial services license 224-663.