Risk appetite shores up global stock markets
2024-05-21
Summary:
Investors' risk appetite remained strong, potentially leading to further Asian gains. Japan's Nikkei surpassed 39,000 for the first time in a month.
Tuesday saw investors remaining eager for riskier assets, hinting at possible gains across Asia. Notably, Japan's Nikkei index stayed above 39,000 points, marking its highest level in over a month.
The latest CFTC data show that speculators reduced their net short yen positions for a third week. The continuous slump in the currency, though benefiting exporters, began to prompt profit-taking in the stock market.
Many firms surveyed said they would not be able to hire enough workers if they kept wage growth low, a BOJ survey showed, signalling sustained price growth in the country and hence more rate hikes ahead.
The Nasdaq 100 closed at a record high on Monday and gold jumped to an all-time high as investors weighed hawkish statements from the Fed that pushed Treasury yields higher.
US equity investors' risk appetite grew to 28% in May from 5% in April, to reach its highest reading since Nov 2021, according to the latest results from S&P Global's Investment Manager Index survey.
The S&P 500 finished the session with a modest gain, while the Dow dipped below 40,000. Brokerages have raised their year-end targets for the S&P 500 on expectations of a soft landing and inflation under control.
Deutsche Bank raised its 2024 year-end target to 5,500 from 5,100, the highest among major brokerages, while Morgan Stanley forecast it would hit 5,400 by June 2025.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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