Investing.com - The prospect of further financial aid from Beijing is fueling a surge in Asian stocks, with China poised to take the lead. As anticipation mounts over central bank rate verdicts this week, Wall Street began the week on a positive note.
Early Tuesday trading hinted declines for futures in Japan and Australia. US-listed Chinese shares saw their largest single-day increase in almost half a year on Monday following indications from top leaders of increased support for the beleaguered real estate sector during an influential Politburo meeting. They also promised to stimulate consumption and tackle local government debt.
Although no major stimulus was announced by the Communist Party's decision-making body, trading sentiment was boosted after officials voiced commitment to invigorate the slowing economy. The Dow Jones Industrial Average marked its longest winning streak since 2017 with an eleventh consecutive day of gains. Meanwhile, despite underperformance after Monday’s “special rebalance,” both S&P 500 and Nasdaq 100 traded moderately higher.
In corporate news, Tesla Inc's (NASDAQ:TSLA) strong overseas sales performance led to stock advancement while Apple Inc's (NASDAQ:AAPL) steady iPhone shipments amidst global unrest pushed up share prices as per reports by Bloomberg News.
Investors are keenly observing key meetings this week at Federal Reserve and European Central Bank for signs that aggressive policy tightening might be nearing its end amid warnings about continuous rate hikes causing recessionary effects supported by disappointing data from both US and Euro-area economies. In tandem with these economic developments, corporate giants including Microsoft Corporation (NASDAQ:MSFT) and Samsung Electronics Co Ltd (KS:005930), collectively valued at $27 trillion are set to announce results.
George Mateyo, Chief Investment Officer at Key Private Bank suggests market signals indicate another quarter-point rate hike is imminent while investors look beyond immediate announcements toward future trends.
Simultaneously, two-year US bond rates rose following auction results, touching the highest point since 2007, while Bitcoin dropped below $29k momentarily before recovering. With Russia targeting one of Ukraine’s largest Danube river ports wheat and corn prices surged along with West Texas Intermediate crude crossing the $78 per barrel mark
AMC Entertainment Holdings Inc's (NYSE:AMC) revised stock conversion plan post surprise court ruling propelled their stocks upwards whereas Chevron Corp (NYSE:CVX) reported solid earnings growth leading to enhanced investor interest.
However, JP Morgan strategist Marko Kolanovic warns against potential market volatility due to aggressive interest-rate hikes globally coupled with dwindling consumer savings amidst an unstable geopolitical scenario
As we move into the second-quarter reporting season, Kolanovic predicts a muted response toward earning reports given the previous strength shown by markets. The future course of the world’s biggest economy largely depends on Fed's acceptance level towards inflation significantly higher than the preferable range making way potentially for another quarter-point raise this Wednesday
Paul Nolte from Murphy & Sylvest Wealth Management opines any decline triggered due to earnings disappointment or a selling spree induced by Fed may not affect the long-term market trajectory. Bank Of America strategists observe larger-than-expected moves yet predominantly negative direction reflecting pre-priced good news posing positioning risk.