Summary:
Asian stocks remained stable after the S&P 500's strongest weekly surge in 2024. The semiconductor index surged, driven by ongoing AI optimism.
Asian stocks were nearly flat on Monday after the S&P 500 registered its
biggest weekly gain of this year. The semiconductor index soared again amid
continued optimism over AI.
The Dow climbed 2%, also its biggest weekly gain since mid-December, while the Nasdaq rose 2.9%, its biggest since mid-January.
US companies' purchases of domestic equities through more stock buybacks and corporate acquisitions will hit a six-year high of $625 billion this year, about as much as mutual funds and pension houses will offload, Goldman Sachs said.
The bank estimated that mutual funds and pension funds will offload $300 and $325 billion of stocks respectively on a net basis as investors may seek protection from lower-risk assets such as bonds.
Earlier this month, Goldman Sachs said it expects S&P 500 companies' share repurchases to jump 13% to $925 billion this year, and then top $1 trillion next year.
Potentially lower borrowing costs is another catalyst. Traders now see about a 71% chance of the first rate cut hitting in June, according to the CME's FedWatch Tool.
The Dow sits comfortably above its 50 EMA which could offer some support. There are few signs of a potential reversal of uptrend for now despite of overbought suggested by RSI.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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