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Asian stocks follow Wall Street higher

Wall Street

The S&P 500 reached a new all-time high, close to the 5,000-point mark, while the Nasdaq and Dow were also well up

Most Asian stocks rose Thursday following another record on Wall Street, with strong earnings, a strong US economy and Chinese moves to boost the country’s markets playing up against fading hopes for an early Fed interest rate cut.

Fresh comments from US monetary policymakers pushing back against lowering borrowing costs too early were unable to overshadow a series of forecast-beating reports from top companies this season including Amazon and Facebook parent Meta.

With traders now resigned to fewer rate cuts this year, they are also now focusing on data showing that US growth remained on track and jobs were still being created, all as inflation dropped.

In the latest moves to temper bets on a dovish Fed pivot, the bank’s Richmond president Tom Barkin said he was “very supportive of being patient” on announcing the first reduction, citing the strong metrics.

And governor Adriana Kugler added that she wanted to wait until more data was available before moving.

While data continue to show the inflation battle is being won, decision-makers are disinclined to cut too early in case prices rebound.

Still, New York traders were in a good mood, helped by healthy results from Disney, Ford and Chipotle Mexican Grill.

That helped the S&P 500 reach a new all-time high, close to the 5,000-point mark, while the Nasdaq and Dow were also well up.

Higher rates do not seem to burden consumers or corporations significantly, enabling the Federal Reserve to wait longer to ensure inflation control without disrupting the stock market’s momentum, said Stephen Innes at SPI Asset Management.

It is becoming increasingly evident that equities are unfazed and indifferent to the Fed’s less dovish stance, which indicates that unless there is a substantial deterioration in the labour market, the central bank’s baseline expectation for 2024 includes three rate cuts, he added.

Asia was largely positive and Shanghai was again sharply up, building on the near 5% gains over the previous two days as investors cheered a number of pledges from Beijing to staunch a long-running rout.

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