Stock markets look for direction
It was an inconclusive session overnight in New York as recession fears and lower oil prices seemed to weigh on value stocks while the buy-the-dip gnomes piled back into growth as longer-dated US yields headed lower. The S&P 500 edged 0.25% higher, while the Nasdaq gained 0.98%, but the Dow Jones ended the session 0.26% lower. In Asia, that has continued with Nasdaq futures rising 0.75%, S&P 500 futures rising 0.35%, and Dow futures edging 0.23% higher.
Part of the rally in US futures could be explained by China’s stock market outperformance today. With inflation data benign, China markets have quickly moved to price in room for heavier China stimulus going forward. That has seen the Shanghai Composite jump higher by 1.63%, the CSI 300 rally by 2.04%, and the Hang Seng gain 1.62%.
Elsewhere in the Asia-Pacific, the performance is more mixed as China recession fears and Fed rate hikes continue to buffet local markets. The more Nasdaq-aligned Nikkei 225 has risen by just 0.12%, but the Kospi has slipped 0.20% lower, with Taipei unchanged. Singapore is down by 0.60%, with Kuala Lumpur edging 0.15% higher ahead of the BNM policy decision. Jakarta is 0.60% higher, while Bangkok has lost 0.50% and Manila is 0.70% lower. In Australia, the All Ordinaries have slipped by 0.12%, and the ASX 200 has lost 0.28%. Overall, the picture is one of the markets left to their own devices after an inconclusive US session and a slow headline reel in Asia.
European markets are likely to take fright at potential trans-Ukraine natural gas disruptions and track lower initially. US markets will continue to be buffeted by the Fed speaker rent-a-crowd, with US inflation data set to define the session.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays.
A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia as well as in leading print publications including the New York Times and The Wall Street Journal, among others.
He was born in New Zealand and holds an MBA from the Cass Business School.
