(Bloomberg) — Asian stocks mostly rose as U.S. stocks rose modestly to a new record, but Chinese markets remained mixed over Beijing’s latest pledge to halt a stock market crash. showed a reaction.
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An index of Chinese stocks listed in Hong Kong rose as much as 1.3% in early trading, while the CSI300 mainland benchmark fell 0.7% after falling almost 1% in the early session. The volatile performance came after Chinese Premier Li Qiang announced more “strong” measures to stabilize his country’s struggling stock market.
Elsewhere in Asia, Japanese stocks looked poised to rise for a third straight day ahead of the Bank of Japan’s monetary policy decision, while stocks in South Korea and Australia also rose.
Timothy Mo, chief Asia-Pacific equity strategist at Goldman Sachs Group, said on Bloomberg TV that China’s sell-off continues as investors worry about structural challenges in China’s economy and the lack of a strong policy response. He said there were “signs of capitulation” in Chinese stocks. . “If the actual policy being hinted at is not well communicated, people will sell.”
In Japan, the central bank is expected to leave key monetary policy settings unchanged on Tuesday. It will be interesting to see how Governor Kazuo Ueda evaluates progress toward achieving the sustainable inflation needed to lift negative interest rates. The yen exchange rate was strong.
The persistent concerns about Chinese stocks are in stark contrast to the United States, where investors are weighing strong economic data and the outlook for corporate earnings. Wall Street stocks are weathering a rocky start to the year, with the Federal Reserve cutting interest rates and expectations that the artificial intelligence boom will continue to drive profit growth.
The S&P 500 index was hovering around 4,850 on Monday. U.S. Treasuries were flat in early Asian trading after the 10-year Treasury yield fell 2 basis points to 4.10% on Monday. The dollar was also little changed.
“Things are changing for the bulls,” said David Donabedian of CIBC Private Wealth US. “Investor optimism was driven by the belief that there would be aggressive rate cuts by the Fed. Investor belief has now shifted to the view that the economy is completely safe. No matter how high interest rates rise, the economy will continue to perform well.”
back to the highs
Last week’s record close for U.S. stocks pushed valuations back to last July’s highs. But Citigroup’s Scott Kronert says a closer look reveals that the market isn’t as expensive as it seems.
Rising stock prices for Apple Inc., Microsoft Corp., Nvidia Corp., Alphabet Inc., Amazon.com Inc., Meta Platforms Inc. and Tesla helped revive Wall Street. The equal-weighted version of the S&P 500 removes some of its outsized influence, yielding a ratio of expected earnings of approximately 16 times, a 17% discount from the benchmark’s standard valuation.
“We maintain our preference for the semiconductor and software sectors, as AI remains a key theme driving global tech stocks this year and will continue to do so over the next decade. “We see opportunities in sectors related to AI and edge computing,” Solita said. Mr. Marcelli of UBS Global Wealth Management.
Even as the S&P 500 index closed at an all-time high on Friday, managers and analysts are at odds with data showing the resilience of the U.S. economy and Fed officials who oppose cutting interest rates too soon. .
Latest warning for investors making all-out dovish financial bets: Two-thirds of Bloomberg Markets Live Pulse respondents say early financials are among their favorite trades heading into 2024. He said betting on easing would be “the most foolish thing to do.”
Earnings season is in full swing this week, with companies like Netflix, Tesla, and Intel scheduled to report their results.
This week’s main events:
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Japan’s Bank of Japan interest rate decision, Tuesday
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Eurozone consumer confidence, Tuesday
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The nation’s first presidential primary will be held in New Hampshire on Tuesday.
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European Central Bank releases bank lending survey on Tuesday
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Canadian interest rate decision Wednesday
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Eurozone S&P Global Services and Manufacturing PMI, Wednesday
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US S&P Global Services and Manufacturing PMI, Wednesday
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Eurozone ECB interest rate decision Thursday
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Germany IFO Business Environment Thursday
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US GDP, new unemployment claims, durable goods, wholesale inventories, new home sales, Thursday
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Japan Tokyo CPI, Friday
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US Personal Income and Expenditures, Friday
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Bank of Japan issues minutes of policy meeting on Friday
The main movements in the market are:
stock
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S&P 500 futures little changed as of 10:30 a.m. Tokyo time S&P 500 up 0.2%
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Nasdaq 100 futures were little changed.Nasdaq 100 almost unchanged
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Japan’s TOPIX rose 0.4%
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Australia’s S&P/ASX 200 rose 0.6%
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Hong Kong’s Hang Seng rose 0.6%
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The Shanghai Composite fell 0.4%.
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Euro Stoxx50 futures fell 0.1%
currency
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Bloomberg Dollar Spot Index little changed
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The euro was almost unchanged at $1.0878.
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The Japanese yen was almost unchanged at 148.11 to the dollar.
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The offshore yuan was almost unchanged at 7.1964 yuan to the dollar.
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The Australian dollar rose 0.1% to $0.6579.
cryptocurrency
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Bitcoin remains almost unchanged at $39,780.07
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Ether rose 0.1% to $2,327.45
bond
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The 10-year government bond yield was almost unchanged at 4.10%.
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Japan’s 10-year bond yield fell 1 basis point to 0.640%.
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Australian 10-year bond yields fell 2 basis points to 4.20%.
merchandise
This article was produced in partnership with Bloomberg Automation.
–With assistance from Jason Scott and John Cheng.
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