Summary:
Asian shares rose after new highs in US stocks on Tuesday. This week, central banks will scrutinize and test rate-cut expectations.
Asian shares edged higher on Tuesday after US stocks closed at new highs for the year. Later this week central banks will put rate cut expectations to the test.
With inflation slowing down gradually, now investors believe policymakers are all done with interest rate hike cycle including the Fed and rate cuts will probably begin in the first half of next year.
The EURO STOXX 50 rose to its highest since 2000 this month while the FTSE 100 remains sluggish. The ECB and the BOE are due to make policy announcements after the Fed.
Morgan Stanley’s strategists saw US stocks and bonds outperforming their emerging markets peers next year, according to a note in Nov, as US earnings growth could rebound in 2024
It said risk-off sentiment in first half may drive safe-haven demand for the US dollar and US dollar-denominated assets and the 10-year Treasury yield may fall back below 4%.
The S&P 500 will hit a record high in 2024 as the US avoids sinking into a recession, although it will not gain as much as this year due to softening consumption, according to Bloomberg’s latest Markets Live Pulse survey.
The index is in a rising trend channel in the long term but RSI above 70 means it could face an imminent correction. As long as the 4500 level holds, US equities should have further to go.
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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