Asian shares struggled to make much ground on Monday as fading chances for early rate cuts globally soured the mood and Chinese markets returned from the holiday with only muted gains.
A holiday for U.S. markets also made for thin trading, while the latest surge in tech stocks is set to be tested by results from AI diva Nvidia, on Wednesday.
Japan’s Nikkei dipped 0.1%, having surged more than 4% last week to stop just short of its all-time high.
EUROSTOXX 50 futures also eased 0.3% and FTSE futures lost 0.2%.
Futures have sunk to imply just a 28% chance rates will be cut in May, when it was considered a done deal a couple of weeks ago. Markets have taken out two quarter point rate cuts for this year to imply less than 100 basis points of easing.
The market sea change on rates saw two-year Treasury yields spike to a new 2024 high of 4.72% on Friday before steadying at 4.65%. Treasury futures were little changed on Monday with the cash market closed.
S&P 500 futures were flat, while Nasdaq futures added 0.24% helped by hopes Nvidia could somehow beat already stratospheric expectations.
Our upgraded 2024 EPS forecast of $241 – 8% growth – stands above the median top-down strategist forecast of $235, said Goldman. We expect P/E valuation multiples will remain close to current levels, making earnings growth the primary driver of remaining upside this year.
Oil prices were softer in early trade as concerns about demand tussled with the threat of supply disruptions in the Middle East.
