JASPER’S MARKET SQUAWK 29-01-2024

Asian Markets Soar Amid Beijing’s Stimulus Promises

Market Movers

Hong Kong’s Hang Seng index rises over 1%.
Mainland Chinese blue chips hold near three-week highs.
The US dollar remains steady, close to a six-week high.
Asian markets rally despite Evergrande’s liquidation.
US stock futures point slightly lower.

What’s Happening

Hong Kong’s Hang Seng Index Rises

The Hang Seng index in Hong Kong has seen a significant rise of over 1%, showcasing a bullish trend despite the broader regional challenges. This uptick seems to be a reaction to Beijing’s commitment to implementing stimulus measures, which are finally turning into tangible actions. Investors appear to be responding positively to these developments, signalling a rebound from the index’s 15-month low last week.

Stability in Mainland Chinese Blue Chips

Mainland Chinese blue chips have shown a notable level of stability, hovering around three-week highs. This comes after a period of turbulence that saw these stocks hitting five-year lows. The steadiness in these stocks is indicative of underlying resilience in the Chinese market, possibly buoyed by the government’s recent measures to stabilise markets, such as suspending the lending of restricted shares and cutting bank reserve ratios.

US Dollar’s Steadfast Position

The US dollar index, a measure against a basket of currencies, held a strong position, hovering close to a six-week high. This stability comes amid anticipations of the Federal Reserve’s policy meeting and prevailing geopolitical tensions.

Asian Markets Rally Amid Challenges

Asian stock markets, particularly in regions like Tokyo and Seoul, have rallied, showcasing remarkable resilience. This positive trend occurs despite the backdrop of significant challenges such as China Evergrande’s liquidation.

US Stock Futures Indicate Caution

In a slight divergence from the Asian market trend, US stock futures indicated a modest downward adjustment. This trend suggests a sense of caution among investors, likely influenced by recent fluctuations in the S&P 500.

Additionally, the upcoming week is loaded with major events including a plethora of corporate earnings reports from leading tech companies like Alphabet, Microsoft, Apple, Amazon, and Meta Platforms. The anticipation of the Federal Reserve’s policy decision and the critical monthly jobs report also contribute to the cautious sentiment in the US market.

Econ Calendar

Federal Reserve’s policy decision on Wednesday.
US monthly jobs report due Friday.
Earnings reports from Alphabet, Microsoft, Apple, Amazon, and Meta Platforms.
Sweden’s GDP figures release.
Bank of England’s policy announcement later this week.

Chart of the Day

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This fantastic heatmap allows you to look at the main economic indicators of the United States and focus on a single number that will help you understand how likely a recession is (Recession Pressure %).