Asian stock markets are gearing up for a varied start following a late drop in US benchmarks, as investors recalibrate after a significant rally. The global stock upsurge, exceeding $4 trillion this year, has prompted a cautious portfolio adjustment.
Futures in Sydney and Hong Kong hint at potential declines, while Tokyo shows promise of modest gains. This comes after the S&P 500 experienced its third consecutive day of losses, despite nearly a 10% increase this quarter. With the US equity benchmark aiming for its fifth month of gains, the sustainability of the rally amidst high stock valuations is under scrutiny.
Experts like Keith Lerner from Truist Advisory Services suggest that while pullbacks are expected, the primary market trend remains upward. Investors are encouraged to view any dips as buying opportunities.
Notable market movements include Nvidia's pause after a six-day streak and United Parcel Service Inc.'s 8% drop due to skepticism around its sales target. Meanwhile, Trump Media & Technology Group Corp. saw an uptick in its public trading debut.
In Asia, Japan's Nikkei 225 stands out with a year-to-date increase of over 20%, potentially marking one of its best quarters. Conversely, Hong Kong struggles to rebound from early-year losses, and Sydney anticipates a slight rise.
The bond market saw Treasuries recover post a $67 billion five-year note sale. In commodities, gold prices inched higher, while cocoa surpassed $10,000 a metric ton for the first time. The dollar remained stable.
With the Federal Reserve's preferred inflation measure release on the horizon, market watchers analyzed recent economic data, noting steady consumer confidence and a surge in home-price growth.
JPMorgan Chase & Co.'s Marko Kolanovic points out that for stocks to justify recent gains, global central banks need to soften monetary policies, and companies must report strong earnings growth.
Corporate highlights include a significant drop in Apple Inc.'s iPhone shipments in China, Dell Technologies Inc.'s workforce reduction, and McDonald's Corp.'s partnership with Krispy Kreme Inc. Additionally, despite a crypto market rally, short sellers are heavily betting against it, particularly targeting MicroStrategy Inc. and Coinbase Global Inc.
Upcoming key events include various economic reports and speeches from Federal Reserve officials, with markets closed on Good Friday in observance of the holiday.
Overall, market analysts remain optimistic, with predictions of continued US stock market attractiveness and potential S&P 500 rally into mid-April before a consolidation phase.
