Stocks resume their climb
Fed Chairman Jerome stuck to his script yesterday, as he beat the transitory inflation drum and dampened expectations of a rate hike. Although the reaction in markets was not spectacular, Powell’s comments greenlighted a further recovery in US stocks yesterday, with technology leading the way as the climbed 0.79%. Meanwhile, the rose 0.51%, while the edged 0.20% higher. Futures on all three have increased around 0.20% today, further underpinning sentiment in Asia.
Japan markets have paused for breath after a wild couple of days, the creeping just 0.10% higher, while the has rallied by 0.45%. Mainland China is also enjoying a positive day, with the and rising by 0.45% and 0.75%, respectively, while , home to many China technology behemoths, has leapt 1.50% higher.
Singapore has risen 0.55% after Global Foundries announced a USD4 billion investment and vote of confidence in the city-state. Kuala Lumpur bucks the trend, falling 0.30%, with Taipei rising 0.30% while Jakarta remains unchanged.
Rising Covid-19 cases in Sydney have prompted other states and New Zealand to close their borders to Sydney travellers. That appears to have sapped sentiment, with tourism also likely to take a hit, as it comes just before the school holidays. That sees the falling 0.40%, while the has fallen by 0.30%. The trajectory of the Sydney outbreak may well subsume other directional indicators for Australian stock markets for the rest of the week.
Like Wall Street yesterday, Asian markets that are more high-tech-heavy appear to be modestly outperforming this afternoon. European markets should open modestly higher ahead of their dump, but markets will still be vulnerable to headline and Fed-speak whipsaws for the rest of the week.
A softer and from the US tomorrow may also dampen the taper-tantrum nerves, which have calmed considerably since last week.
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