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(Bloomberg) — Asian stocks rose broadly, led by tech stocks this week ahead of events such as Federal Reserve Chairman Jerome Powell’s Congressional testimony and China’s National People’s Congress.
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Tech stocks outperformed regional stock indexes, with Taiwan Semiconductor Manufacturing and Samsung Electronics leading the gains. Japan’s blue-chip Nikkei stock average also exceeded 40,000 yen for the first time, and South Korea’s Kospi index rose 1.5%. Their gains followed a strong rebound from U.S. peers on Friday.
“The Nikkei 40,000 yen is certainly an important psychological level and could create some resistance and volatility for the index,” said Charu Chanana, a strategist at Saxo Capital Markets in Singapore. Ta. “However, if structural factors remain favorable and the yen continues to weaken, it is likely to send a bullish signal rather than fueling concerns that Japanese stocks are overbought.”
Chinese stocks were volatile ahead of the 14th National People’s Congress, the annual legislative session that opens in Beijing on Tuesday, as markets await further stimulus to support the weak economy. Most healthcare stocks rose on expectations for policy support from the National People’s Congress.
“We still think earnings growth is reasonable this year. We expect earnings growth of about 8% to 10%,” Kinger Lau, a strategist at Goldman Sachs Group, told Bloomberg. He talked about Chinese stocks on TV. Combined with the current low valuations and potential policy support from the National People’s Congress, “we think the market is pretty well poised to do better over the next 10 to 12 months.”
Oil prices stabilized near this year’s highest levels after the Organization of the Petroleum Exporting Countries (OPEC+) extended production cuts to prevent a global oil glut. U.S. crude oil traded around $80 a barrel in Asia, holding its lowest level in nearly four months on Friday.
U.S. Treasuries fell slightly ahead of a series of U.S. indicators, but Japanese government bonds were little changed as traders digested a report in which the government is considering formally ending deflation. The dollar traded in a narrow range against the G10.
On the credit front, Adani Group has started selling dollar-denominated bonds for the first time since short-seller Hindenburg Research’s report in a bid to restore investor confidence.
Powell’s testimony
Any gains in U.S. markets are likely to depend on this week’s jobs report and testimony from Chairman Powell, as bets on the Fed’s easing cycle begin to refine after recent data showing the resilience of the U.S. economy. Swap traders expect the first decline in July, compared to the May forecast they had priced in early last month, according to data compiled by Bloomberg.
“We don’t expect the chair to deviate significantly from the Fed’s recent messages,” said John Briggs, head of strategy at Global Desk. “It’s there,” he said. NatWest Markets members wrote in a memo: Treasury yields “are rising toward recent highs, and we believe it is highly unlikely that there will be a significant correction toward higher yields in the future.”
Stock prices show little sign of slowing as U.S. corporate profits rose nearly 8% in the fourth quarter, helping offset macroeconomic uncertainty. Meanwhile, the frenzy surrounding artificial intelligence is blinding Wall Street forecasters, who are struggling to keep up with the stock market’s rise, which has already far exceeded their expectations as 2024 begins. This is spurring competition among strategists.
Meanwhile, Bitcoin rose for the second day, briefly topping the $64,000 level. Traders are betting that the cryptocurrency will soon surpass the record price of around $69,000 set during the coronavirus pandemic.
Elsewhere this week, traders will focus on inflation in Tokyo, growth data from Australia and European Central Bank policy decisions. Also due are the so-called Super Tuesday Republican and Democratic primary voting, U.S. jobs data and U.S. consumer discretionary stock gains.
This week’s main events:
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ECB Executive Board member Robert Holzmann speaks on Monday
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Fed’s Patrick Harker speaks on Monday
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Japan’s Tokyo CPI, Tuesday
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Bank of Japan Governor Kazuo Ueda speaks on Tuesday
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China Caixin releases PMI on Tuesday
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China opens the 14th National People’s Congress on Tuesday
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Eurozone S&P Global Services PMI, PPI, Tuesday
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US Factory Orders, ISM Services, S&P Global Services PMI, Tuesday
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More than a dozen U.S. states will hold Republican and Democratic primaries on Tuesday.
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Australian GDP Wednesday
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British Prime Minister Jeremy Hunt releases annual budget on Wednesday
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Eurozone retail sales Wednesday
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Federal Reserve Chairman Jerome Powell testifies before a House committee on Wednesday
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Fed releases Beige Book survey of regional economic conditions Wednesday
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Fed’s Neel Kashkari and Mary Daly speak on Wednesday
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China trade, foreign exchange reserves, Thursday
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Bank of Japan Director Junko Nakagawa speaks on Thursday
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ECB interest rate decision, Thursday
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U.S. new jobless claims, trade, Thursday
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Federal Reserve Chairman Jerome Powell testifies before a Senate committee Thursday
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Fed’s Loretta Mester speaks Thursday
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US President Joe Biden delivers State of the Union address on Thursday
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Eurozone GDP, Friday
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US nonfarm payrolls, unemployment rate, Friday
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Fed’s John Williams speaks on Friday
The main movements in the market are:
stock
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S&P 500 futures were little changed as of 1:30 p.m. Tokyo time.
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Japan’s TOPIX fell 0.1%
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Australia’s S&P/ASX 200 falls 0.2%
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Hong Kong’s Hang Seng hasn’t changed much.
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The Shanghai Composite rose 0.2%.
currency
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Bloomberg Dollar Spot Index little changed
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The euro was almost unchanged at $1.0844.
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The Japanese yen remained almost unchanged at 150.15 yen to the dollar.
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The offshore yuan was little changed at 7.2090 yuan to the dollar.
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The Australian dollar was almost unchanged at US$0.6521.
cryptocurrency
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Bitcoin rises 1.3% to $63,647.71
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Ether remains almost unchanged at $3,480.42
bond
merchandise
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West Texas Intermediate crude oil is little changed.
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Spot gold fell 0.1% to $2,080.64 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Aya Agatsuma and Winnie Hsu.
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