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(Bloomberg) — Asian stocks started the year’s first trading day with little momentum, after U.S. stocks plunged from near all-time highs last week and the market posted its longest weekly gain since 2004.
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Australia’s standards have risen slightly, while Japan, which was hit by a powerful earthquake on New Year’s Day that killed at least six people and issued widespread tsunami warnings, is closed for a public holiday. Chinese stocks edged higher and US stock contracting slowed.
After the S&P 500 soared more than $8 trillion last year, signs of drying up appeared, and the index remains on track for nine straight weeks of gains. Traders have focused on Federal Reserve uncertainty, recession fears and geopolitical risks. And many who entered 2023 fearing everything ended up scrambling to chase the bull market.
“The focus in 2024 shifts from the tail risks of recession and inflation in 2023 to the degree of normalization of the relationship between growth, policy and assets,” Stuart Kaiser, head of U.S. equity trading strategists at Citi, said in a note. ” he said. “If that happens, we would be very cautious about initial push buying, but the Fed, which is more concerned about growth, could provide relief sooner than we expected just a month ago. ”
Investors balked on Tuesday after President Xi Jinping vowed to strengthen economic momentum and job creation in his annual New Year’s address, acknowledging that some businesses and people have endured a difficult 2023. It will monitor Chinese stocks and export-oriented Caixin manufacturing industry statistics.
“We will consolidate and strengthen the momentum of economic recovery and strive to achieve stable and long-term economic development,” Xi said in a televised message to the nation’s 1.4 billion people on Sunday. China’s long-awaited post-pandemic economic boom did not materialize in 2023.
The dollar was little changed. There were no cash transactions in U.S. Treasuries in Japan as the market was closed.
Meanwhile, oil prices rose after Iran sent warships to the Red Sea after the U.S. Navy destroyed three Houthi ships over the weekend, a move that will further heighten tensions and disrupt global trade. It risks complicating the U.S. goal of securing vital waterways. .
Return to start
After a year of wild swings and numerous head fakes, the 10-year US Treasury yield ended 2023 close to where it started. This is an almost farcical conclusion to a 12-month period of trading that fell to 3.25% in the wake of the banking crisis in March and then rose above 5% just a few months later.
Key inflation data confirming growing expectations that the central bank will cut interest rates aggressively in 2024, driving solid gains in both stocks and bonds over the past two months. The rally was also driven by Fed Chairman Jerome Powell’s dovish policy shift at the December policy meeting.
However, some investors are choosing to take a cautious approach.
“We take great comfort in the fact that the Fed completed its tightening without fully considering the rollover effects of interest rates,” said Vishnu Varasan, head of economics and strategy at Mizuho Bank. He spoke on Bloomberg TV.
This week’s main events:
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China Caixin Manufacturing PMI Tuesday
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Eurozone S&P World Eurozone Manufacturing PMI, Tuesday
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UK S&P Global UK Manufacturing PMI, Tuesday
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German unemployment rate Wednesday
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US FOMC Minutes, ISM Manufacturing, Recruitment, Light Vehicle Sales, Wednesday
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Richmond Fed President Tom Barkin, 2024 FOMC voter, speaks Wednesday
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China Caixin releases PMI on Thursday
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Eurozone S&P Global Eurozone Services PMI, Thursday
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U.S. new jobless claims, ADP employment, Thursday
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Eurozone CPI, PPI, Friday
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US non-farm payrolls/unemployed, factory orders, ISM services index, Friday
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Richmond Fed President Tom Barkin, 2024 FOMC voter, speaks on Friday
The main movements in the market are:
stock
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S&P 500 futures were little changed as of 9:11 a.m. Tokyo time. The S&P 500 fell 0.3% on Friday.
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Nasdaq 100 futures were little changed.Nasdaq 100 fell 0.4%
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Australia’s S&P/ASX 200 index rises 0.4%
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Hong Kong’s Hang Seng futures rose 0.2%.
currency
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Bloomberg Dollar Spot Index little changed
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The euro was almost unchanged at $1.1037.
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The Japanese yen fell 0.2% to 141.13 yen to the dollar.
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The offshore yuan rose 0.1% to 7.1165 yuan to the dollar.
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The Australian dollar was almost unchanged at US$0.6814.
cryptocurrency
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Bitcoin rose 2% to $44,482.12
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Ether rose 0.7% to $2,354.22
bond
merchandise
This article was produced in partnership with Bloomberg Automation.
–With assistance from Jason Scott and Isabel Lee.
(An earlier version of this wrap was corrected to clarify time reference in third paragraph)
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