MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1 per cent, having jumped 2.8 per cent last week to a two-month high
Japanese shares jumped to highs not seen since 1990 on Monday as strong earnings and offshore demand fuelled a three-week winning streak, while other Asian markets were more mixed with focus on the U.S. rate outlook.
Japan’s Nikkei gained another 0.6 per cent to break its September peak and bring its gains for the month so far to 9.3 per cent.
Financial shares led the advances Monday as investors prepare for an eventual end to negative rates, while auto makers have been benefiting from a weak yen and high exports.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1 per cent, having jumped 2.8 per cent last week to a two-month high.
The Black Friday sales will test the consumer-driven U.S. economy this week, while the Thanksgiving holiday will make for thin markets.
S&P 500 futures eased 0.1 per cent and Nasdaq futures shed 0.2 per cent. The S&P is now around 18 per cent up for the year and less than 2 per cent below its July peak.
Yet analysts at Goldman Sachs note the “Magnificent 7” mega cap stocks have returned 73 per cent for the year so far, compared to only 6 per cent for the remaining 493 firms.
We expect the mega-cap tech stocks will continue to outperform due to their higher expected sales growth, margins, re-investment ratios, and balance sheet strength, they stated in a note. But the risk/reward profile is not particularly compelling given higher expectations.
Tech giant Nvidia reports quarterly results on Tuesday, and the focus will be on state of demand for its artificial intelligence related products.
The flow of U.S. economic data turns to a trickle this week, but minutes of the Fed’s last meeting will offer some clues to policy makers’ thinking as they held rates steady for a second time.