Japan's Nikkei hits fresh 34-year highs; most Asian markets are closed for Lunar New Year holiday
Japan’s Nikkei hit fresh 34-year highs on Friday, while most Asia-Pacific markets were either fully or partially closed for Lunar New Year holidays.
Japan’s Nikkei 225 breached the 37,000 mark for the first time in 34 years, rising 0.64%, while the Topix was up 0.19%
Australia’s S&P/ASX200 rose 0.18%.
Hong Kong’s Hang Seng index plunged 1.63%, led by declines in consumer non-cyclicals and technology stocks.
Overnight in the U.S. the S&P 500 finished little changed on Thursday after briefly topping the 5,000 milestone for the first time on record.
The broad-based index edged up 0.06% to finish at 4,997.91 after reaching a high of 5,000.40.
The Dow Jones Industrial Average rose 0.13%, while the Nasdaq Composite gained 0.24%.
Disney shares rallied nearly 8% in the premarket after the entertainment giant posted strong earnings and guidance after the bell Wednesday as it cuts streaming costs.
The company posted adjusted earnings of $1.22 per share, topping an LSEG estimate of 99 cents. Revenues came in at $23.55 billion, falling short of the $23.64 billion expected by analysts. Management also said adjusted earnings are expected to rise 20% to $4.60 per share in the fiscal year.
Disney also said its poised to meet or surpass its goal to cut at least $7.5 billion in costs by the end of the fiscal 2024 year and announced a $1.5 billion stake in Fortnite creator Epic Games.
The company also plans to launch its flagship ESPN streaming service in 2025 and said it would stream an exclusive iteration of Taylor Swift’s Eras Tour movie.
Arm re porting stronger-than-expected earnings
Softbank Group shares jump almost 10% on open
Shares of Japan’s Softbank Group jumped almost 10% on open, extending gains from the 11.06% rise recorded on Thursday.
The move comes as chip designer Arm’s shares surged 48% on Thursday, valuing it at over $116 billion.
SoftBank still owns roughly 90% of the outstanding stock, meaning its stake in Arm increased by over $34 billion in a day.
Bank of America has named the index to own in 2024 over the S&P 500 as inflation is among the “biggest risks” in 2024.
Big Tech was the stand-out performer last year, as investors piled into the so-called “Magnificent Seven”: Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla.
Bitcoin related stocks surged on Thursday as the price of the flagship cryptocurrency rose 3% to its highest level in almost a month.
Shares of crypto exchange Coinbase jumped about 8%, while bitcoin proxy Microstrategy added 15%. In the mining group, CleanSpark rose 12%, Riot Platforms advanced 15%, while Marathon Digital gained 22% and Iris Energy surged 22%.
Crude oil futures prices rose for the fourth day in a row afte Israel rejected a ceasefire proposal by Hamas.
The West Texas Intermediate futures contract added $2.14, or 2.90%, to trade at $75.98 a barrel. The Brent contract for April gained $2.16, or 2.73%, to trade at $81.37 a barrel.
U.S. crude and the global benchmark are up 2.94% and 3.42% respectively for the week as the Middle East teeters between another round of violent escalation and a possible truce in the Gaza war.
U.S. Secretary of State Antony Blinken is on a diplomatic tour of the region this week in an effort to secure an extended humanitarian pause in Gaza in exchange for the release of hostages by Hamas.
Blinken met Israel Prime Minister Benjamin Netanyahu Wednesday to discuss a counterproposal by Hamas that demands a permanent end to the fighting.
Netanyahu rejected the Hamas’ proposal, vowing to press on to the southern city of Rafah on the border with Egypt and achieve “total victory” in Gaza.
Richmond Federal Reserve President Thomas Barkin joined the chorus of cautious central bankers, saying in a speech Wednesday that the fight against inflation isn’t over yet.
Speaking to the Economic Club of New York, Barkin noted the progress against higher prices, but warned that “the plane has not landed yet.”
Worries include a changing labor market with higher wage pressures, a housing market were prices are elevated because of a dearth of supply, and the trend of deglobalization after snagged supply chains in the early days of the Covid pandemic helped generate the rise in inflation to hits highest level in more than 40 years.
There’s also a history of the Fed letting up too soon during earlier cycles.
“The Fed is committed to returning inflation all the way to 2 percent. As I think about that commitment, I can’t help but look to lessons from the past. History tells many stories of inflation head-fakes,” added Barkin, who is a voting member this year of the rate-setting Federal Open Market Committee.
Asia-Pacific Markets Update: Japanese Stocks Reach New Highs, Hong Kong Index Plunges
Japan’s Nikkei 225 reached fresh 34-year highs, breaching the 37,000 mark for the first time in 34 years. Australia’s S&P/ASX200 also rose, while Hong Kong’s Hang Seng index plunged 1.63% with declines in consumer non-cyclicals and technology stocks. The US markets experienced little change, with the S&P 500 briefly surpassing 5,000 before finishing at 4,997.91. Softbank Group shares increased almost 10% following a rise in chip designer Arm’s shares. Bank of America named an index to outperform the S&P 500 due to inflation being among the 2024 “biggest risks.” Bitcoin and crude oil futures prices also saw positive movements.