Asian Stocks Lack New Year Cheer In Thin Trading: Markets Wrap

(Bloomberg) — Asian equities began the first trading day of the year with little momentum, after US stocks retreated from near all-time highs last week in a blip for a market notching its longest weekly advance since 2004. (Bloomberg) — Asian equities began the first trading day of the year with little momentum, after US stocks retreated from near all-time highs last week in a blip for a market notching its longest weekly advance since 2004. Australian benchmark ticked slightly higher, while Japan — hit by a powerful earthquake on New Year’s Day that killed at least six people and triggered a widespread tsunami warning — is closed for holidays.

Chinese shares were set to edge higher and contracts for US shares were muted. Signs of exhaustion emerged after an over $8 trillion surge in the S&P 500 last year, with the gauge still notching its ninth straight week of gains. Traders have looked past Federal Reserve uncertainty, recession angst and geopolitical risks.

And many who came into 2023 dreading all that have ended up scrambling to chase the rally. “The focus in 2024 shifts from 2023’s recession and inflation tail risks to degrees of normalization in growth, policy and cross-asset relationships,” Stuart Kaiser, US equity trading strategist head at Citi, wrote in a note. “We would be very cautious buying the first dip if that happens, but a more growth-concerned Fed may be quicker to come to the rescue than we expected just a month ago.

” Investors will be monitoring Chinese equities and exporter-oriented Caixin manufacturing data Tuesday after President Xi Jinping used his annual new year address to pledge strengthening of economic momentum and job creation, while acknowledging some companies and citizens had endured a difficult 2023. “We will consolidate and strengthen the momentum of economic recovery, and work to achieve steady and long-term economic development,” Xi said in the televised message Sunday, beamed to his nation’s 1. 4 billion people.

China’s much-anticipated post-pandemic economic boom failed to materialize in 2023. The dollar was little changed. There was no cash trading of Treasuries as markets were closed in Japan.

Meanwhile, oil rose after Iran dispatched a warship to the Red Sea in response to the destruction of three Houthi boats by the US Navy over the weekend, a move that risks ratcheting up tensions and complicating Washington’s goal of securing a waterway that’s vital to global trade. Back at the Start After a year of massive swings and numerous head fakes, the US 10-year yield ended 2023 pretty close to where it began. It’s an almost farcical conclusion to 12 months of trading that saw it tumble to as low as 3.

25% in the wake of March’s banking crisis — only to surpass 5% just a few months later. Key inflation data endorsing a growing narrative that central bankers will aggressively cut rates in 2024 fueled solid gains for both equities and bonds in the last two months. The rally was also driven by Fed Chair Jerome Powell’s dovish pivot at the December policy meeting.

Some investors, however, are opting to take a cautious approach. “We take a lot of solace in the fact that the Fed is done tightening without enough consideration for the level of interest rates that would’ve some rollover effect as we get in,” Vishnu Varathan, head of economics and strategy at Mizuho Bank, said on Bloomberg Television. WATCH: Vishnu Varathan, head of economics and strategy at Mizuho Bank, discusses his outlook for Asia’s macro economy in 2024.

Source: Bloomberg Key events this week: China Caixin manufacturing PMI, Tuesday Eurozone S&P Global Eurozone Manufacturing PMI, Tuesday UK S&P Global UK Manufacturing PMI, Tuesday Germany unemployment, Wednesday US FOMC minutes, ISM Manufacturing, job openings, light vehicle sales, Wednesday Richmond Fed President Tom Barkin — an FOMC voter in 2024 — speaks, Wednesday China Caixin services PMI, Thursday Eurozone S&P Global Eurozone Services PMI, Thursday US initial jobless claims, ADP employment, Thursday Eurozone CPI, PPI, Friday US nonfarm payrolls/unemployment, factory orders, ISM services index, Friday Richmond Fed President Tom Barkin — an FOMC voter in 2024 — speaks, Friday Some of the main moves in markets: Stocks S&P 500 futures were little changed as of 9:11 a. m. Tokyo time.

The S&P 500 fell 0. 3% on Friday Nasdaq 100 futures were little changed. The Nasdaq 100 fell 0.

4% Australia’s S&P/ASX 200 Index rose 0. 4% Hong Kong’s Hang Seng futures rose 0. 2% Currencies The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.

1037 The Japanese yen fell 0. 2% to 141. 13 per dollar The offshore yuan rose 0.

1% to 7. 1165 per dollar The Australian dollar was little changed at $0. 6814 Cryptocurrencies Bitcoin rose 2% to $44,482.

12 Ether rose 0. 7% to $2,354. 22 Bonds Australia’s 10-year yield was little changed at 3.

96% Commodities West Texas Intermediate crude rose 0. 5% to $72. 02 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.

–With assistance from Jason Scott and Isabelle Lee. (An earlier version of this wrap was corrected to clarify time reference in third paragraph) More stories like this are available on bloomberg. com ©2024 Bloomberg L.

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