Asia Runs Out Of Steam
Asian markets puffed out of steam this morning as investors mulled over a number of conflicting economic signals from the US economy. So what’s the story here?
US equities rallied yesterday to break a 5 day losing streak with all major indexes closing higher on the day. The S&P 500 and Nasdaq bumped up 0.72% and 0.71% respectively, aided by a strong turnaround in financial and tech stocks. US treasury yields also came up off their 15 month lows, indicating a slight return to riskier assets.
This was somewhat of a surprise in the wake of some pretty bearish signals from the US economy. Monday’s treasury yield curve inversion, which often signals an oncoming recession, was all but brushed off alongside weaker home building data and a drop in consumer confidence. But what does this all mean?
It would seem that the unprecedented strength of the Jan/Feb bull market has been holding much of the bearish news at bay, but is starting to flag in the absence of any big fundamental growth catalysts. Investors have one foot in the bull market and the other preempting a global downturn.
With markets at somewhat of a turning point, investors will be hoping for a trade deal, Brexit resolution or signs of rate cuts from the Fed to fuel the next global growth spurt in equities. Tick tock.