As we kick off a new week, investors are riding high on the wave of optimism following last Friday’s U.S. jobs report. The data supported the narrative of a “soft landing,” leading to a decrease in the dollar and bond yields, while sending stocks on a relentless “risk on” rally.
At Extreme Investor Network, we are closely monitoring the current state of the global equity markets, where many major indices are either at record highs or multi-year peaks. Despite concerns over valuations and market concentration, the prevailing sentiment of “buy the dip” has kept any pullbacks shallow and short-lived.
In the Asian markets, Japan’s Nikkei 225 index reached a new milestone of 41,100 points, marking a 7% increase in just two weeks. The MSCI Emerging Market and MSCI Asia ex-Japan indices are also soaring to levels not seen in two years.
Political developments in France, where a leftist alliance unexpectedly took the top spot in Sunday’s election, may influence early trading activity in Asia. This outcome, which could result in a hung parliament and exclude the far-right National Rally party from the government, adds an element of uncertainty to the markets.
As we look ahead to the week, key events in Asia include important data releases from Japan, such as bank lending, trade and current account figures, and overtime pay data. Of particular interest is Japan’s overtime pay, which has seen a significant increase this year despite a recent decline in household spending.
Additionally, central bank policy meetings in New Zealand, South Korea, and Malaysia, as well as producer and consumer price inflation figures from China, are expected to move the needle in the coming days. Market watchers are also keeping a close eye on U.S. CPI inflation numbers and the Congressional testimony by Fed Chair Jerome Powell later in the week.
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