Asian equity markets are expected to open higher following a remarkable quarter for US stocks, fueled by optimism that the Federal Reserve can manage a soft landing for the economy.
Despite holiday closures across Australia, Hong Kong, and Singapore, trading continues in Japan, mainland China, and South Korea. Futures indicate an upbeat start, with US-listed Chinese companies also showing potential for gains.
The S&P 500 hit its 22nd record of the year, driven by positive economic indicators and expectations that the Fed will maintain current interest rates for some time. This optimism has resulted in a $4 trillion increase in US equity values over three months, surprising skeptics and prompting analysts to revise their forecasts for 2024.
Lori Calvasina of RBC Capital Markets emphasizes that market pricing is ultimately determined by the collective outlook on economic fundamentals, rather than individual forecasts.
Market movements were cautious, with investors waiting on the Fed's preferred inflation measure and remarks from Jerome Powell. Meanwhile, in Japan, there's heightened vigilance for potential yen fluctuations following a series of data releases and government warnings against the currency's decline.
Upcoming data, including Tokyo's consumer price index and Japan's unemployment rate, will offer further insights into economic conditions. Prime Minister Fumio Kishida has expressed support for continued monetary easing to counteract a weakening yen.
In the US, the S&P 500's quarterly rally exceeded 10%, with two-year yields and the dollar also seeing gains. Economic data showing strong GDP and consumer spending growth, alongside rising consumer sentiment, have bolstered market confidence.
RBC Capital Markets' Calvasina has raised her S&P 500 target to 5,300, citing improved US GDP forecasts. Historical trends suggest that after two consecutive quarters of double-digit S&P 500 gains, some market consolidation may follow, yet the index typically rises by an average of 12.27% one year later.
Corporate highlights include Apple Inc. gearing up for new iPad launches, Home Depot Inc.'s debt plans for an acquisition, and Walgreens Boots Alliance Inc. adjusting its fiscal guidance. Additionally, B. Riley Financial Inc. secures more time for financial reporting, Palantir Technologies Inc. faces a downgrade, Estee Lauder Cos. receives an upgrade, and Country Garden Holdings Co. warns of delayed financial results.
Key events this week include market closures for Good Friday, various economic data releases from Japan and the US, and speeches by Fed officials.
Market updates show slight movements in Hang Seng futures and the S&P 500, while currencies and commodities like gold, bitcoin, and ether see minor changes.
This report was compiled with Bloomberg Automation technology.
