Asia wrap: Solid trade figures from China
|Asian stocks are responding favourably to China's trade data, released by the country's customs agency on Thursday. The report showed that exports in April met expectations, while imports exceeded forecasts. The notable increase in imports suggests potential policy stimulus driving the surge. However, the rise in exports may exacerbate tensions with US leaders contemplating tariff hikes.
US futures remain relatively stable following comments from several Fed officials signalling a "higher for longer" stance on interest rates, tempering the market's rally. Investors are awaiting next week's US inflation data for further insights into the Fed's policy direction.
Meanwhile, the yen stabilized after a three-day decline, possibly due to Japan's discussions regarding potential currency intervention.
Later in the day, attention turned to the Bank of England (BoE) as it discussed its interest rate policy. Speculation abounded about a potential June rate cut, particularly after Sweden's Riksbank reduced rates overnight, highlighting Europe's divergence from the US Federal Reserve.
AMBLE Looking for some bullish vibes? Well, you're not alone in that quest! Interestingly, the financial media and tabloid blogs seem to have a penchant for bearish narratives. But let's face it, fear sells more than optimism in those circles. For us regular investors, a simple and steady approach tends to yield the best results. I mean, who can argue with the wisdom of buy-and-hold indexing? It's like the gospel of investing. So, in the midst of all this noise, it's crucial to maintain a cautiously bullish stance. That means being optimistic but not reckless. After all, there's a fine line between vigilance and paranoia, and we definitely want to steer clear of the latter. Now, about those bullish narratives. Did you know that historically, the period from June to August has been pretty strong for the market? Pulling some interesting views from one of my favourite analysts who got bored with the sell side ( I won’t accredit him as far too smug) According to BofA's Stephen Suttmeier, US stocks have risen about 65% of the time during this period, with an average return of 3.2%. And here's the kicker: this seasonal trend gets even stronger during the fourth year of presidential cycles. Guess what? Yup, you guessed it right. 2024 happens to be a year four. So, despite all the doom and gloom peddled by some, there's plenty of reason to stay optimistic about the market. After all, history tends to repeat itself, right?
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