February 23, 2024
S&P 500 continues to rise defying valuation warnings: market downturn


(Bloomberg) — Japanese stocks were poised to rise as the country’s markets resumed trading after the holiday. US equity futures fell ahead of inflation data due on Tuesday.

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Australian shares were steady in early trading after the S&P 500 finished little changed on Monday. Japanese futures were up 1.6%, helped by a weaker yen, while markets in China, Hong Kong, Taiwan and Vietnam are closed for the Lunar New Year holidays.

The yen was little changed on Monday and traded around 149 per dollar, down from less than 140 at the start of the year. The recent softening reflects comments from Bank of Japan officials that the central bank would be in no rush to exit supportive policy.

SoftBank Group Corp., one of Japan’s largest listed companies, will be in focus after more profits for Arm Holdings Plc, in which it owns a stake. Arm shares rose 29.2% in New York trading on Monday and have nearly tripled since their listing in September.

Strong demand for chips, expected to be a boon for makers of a coming boom in artificial intelligence, helped Nvidia Corp rise on Monday – and briefly overtake Amazon.com Inc’s market value.

Treasuries were largely unchanged on Monday and the 10-year yield rose less than one basis point. Australian and New Zealand yields were also little changed in early Asian trading.

The dollar index remained steady, reflecting calm in Treasury markets ahead of the January US Consumer Price Index report due on Tuesday. The report is expected to show the first reading for year-on-year headline inflation below 3% since March 2021, supporting the deflation narrative that has helped propel equities in recent months.

“It’s important not to lose sight of the bigger picture, which is that persistent deflation should the central bank start tapering this year,” said Mark Haefele of UBS Global Wealth Management.

Federal Reserve Bank of Richmond President Thomas Barkin said a major risk of inflation slipping back toward the central bank’s target comes from U.S. businesses. Many have increased profit margins in recent years by raising prices – a practice that may be difficult to modify and which will provide upward pressure to inflation.

In Asia, data scheduled for release include Japan’s producer prices and New Zealand’s inflation expectations. Australia’s consumer confidence reached a 20-month high in February, a report on Tuesday showed.

Geopolitics remained in focus. The European Union proposed trade sanctions on nearly two dozen companies, including three China-based companies accused of supporting Russia’s war effort in Ukraine.

Bitcoin hit the $50,000 mark for the first time since December 2021, aided by the record-breaking debut of a US exchange-traded fund for the token.

West Texas Intermediate, the US oil price, remained steady on Monday after rising for a sixth consecutive session. Morgan Stanley raised its year-end oil price forecast on signs of tight supply. After a slight fall on Monday, gold was little changed and was trading at around $2,020 an ounce.

Major events of this week:

  • Germany ZEW surveys expectations, Tuesday

  • US CPI, Tuesday

  • Eurozone industrial production, gross domestic product, Wednesday

  • BoE Governor Andrew Bailey testified before the House of Lords economic affairs panel on Wednesday

  • Chicago Fed President Austin Goolsbee speaks on Wednesday

  • Michael Barr, Fed vice chair for supervision, speaks on Wednesday

  • Japan GDP, industrial production, Thursday

  • US Empire Manufacturing, Initial Jobless Claims, Industrial Production, Retail Sales, Business Inventories, Thursday

  • ECB President Christine Lagarde speaks, Thursday

  • Atlanta Fed President Raphael Bostic speaks on Thursday

  • Fed Governor Christopher Waller speaks Thursday

  • ECB Chief Economist Philip Lane speaks, Thursday

  • US housing starts, PPI, University of Michigan consumer sentiment, Friday

  • San Francisco Fed President Mary Daley speaks, Friday

  • Fed Vice Chairman for Supervision Michael Barr speaks on Friday

  • ECB Executive Board member Isabelle Schnabel speaks on Friday

Some key movements in the markets:

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  • S&P 500 futures fell 0.2% at 8:29 a.m. Tokyo time

  • Nasdaq 200 futures fell 0.2%

  • Nikkei 225 futures rose 1.6%

  • Australia’s S&P/ASX 200 was little changed

currencies

  • The Bloomberg Dollar Spot Index was little changed

  • Euro unchanged at $1.0772

  • Japanese yen little changed at 149.32 per dollar

  • Offshore yuan little changed at 7.2150 per dollar

cryptocurrency

  • Bitcoin rose 0.3% to $49,991.12

  • Ether rose 1% to $2,658.72

bond

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This story was generated with the assistance of Bloomberg Automation.

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Source: ca.finance.yahoo.com

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