The Asian shares reached a 7-month high on Monday due to Beijing providing more stimulus to the Chinese economy, but the investors remained cautious as there is a likelihood that the earnings reports by companies will not be that good.
In the market:
The Asia-Pacific shares broadest index the MSCI reached its peak since August 2018 but became flat and so was the Chinese blue chips shares which hit a peak and as the session went on fell by 1% as the investors became cautious. The S&P 500 continued its winning run for its 7 consecutive days. The S&P 500 e-mini futures fell by 0.2% and Japan’s Nikkei after hitting its best this year fell by 0.1%.
The dollar reduced from its recent highs against the yen and was at 111.41 after reaching a peak of 111.12 in March. Against the other big currencies, the dollar fell to 97.266 from its March high of 97.710. The Euro remained at $1.1226 after recovering from a 20-month low of $1.1174. The pound was at $1.3063 even as the Brexit impasse continues to trouble the country.
Oil prices continue to retain its highest levels since last year November due to supply cuts by OPEC and also sanctions by the US on Iran and Venezuela. The US crude was at $63.36 for a barrel and Brent was at $70.63 a rise of 39 cents.
Spot gold remained firm and was at $1,296.52 for an ounce.
Despite reliable information on the latest stimulus provided by the Chinese government of rate cuts by banks which helps small and medium-size businesses get finance, the investors are cautious in the share market. Additionally, the US payroll report showed a job rise of 196,000 and a wage growth of 3.2% which was a huge relief for many as it showed that growth is happening and wage growth points to less inflation threat. Global head of Deutsche Bank said, “It plays to the idea that US economy remains reasonably robust, and does not justify any rate cut expectations in the next six months and is to that extent going to play to buying US dollars dips versus the majors.” But that has not changed the market sentiment.
Many investors remain cautious as analysts believe that the first quarter corporate earnings will be less. Major banks like Wells Fargo and JP Morgan Chase, etc will post their earnings this Friday. Moreover, the Federal Policy meeting’s minutes will be out on Wednesday which has made the markets dovish.