Asia morning update

US markets continued on an upward trajectory on Tuesday, bringing positive leads to Asian markets in the middle of the week.

Wall street
Source: Bloomberg

The markets look set to be supported in the day, chugging ahead to an eventful Wednesday.

Wall Street clocked gains for a second day of the week, having earnings helping the indices up another leg. A 105.1% surprise on the upside for Caterpillar Q1 earnings per share shot the construction and mining stock to the top gainer position on the S&P 500 index with 7.86% increase in share price. Together with the outperformance of McDonald’s, the Dow Jones benefitted from this tide of strong earnings and gained 1.12% on Tuesday.

Clearly, the elimination of the French election risk and the anticipation of President Donald Trump’s tax announcement continue to give the market confidence to continue to buy into the US stock market. Prices for the S&P 500 can be seen once again teeing the recent high ahead of 2400. Watch for false breaks, though a close above the all-time high today could bring in a fresh wave of interest. 

AMU_260417
Source: IG

While there is a lack of data updates from the US midweek, the attention is expected to rest with President Donald Trump’s tax announcements. The market certainly appears to be conflicted in terms of what to expect from the new administration. The unveiling of the tax plan has been a long-awaited one for the markets. However, a portion of the market remain sceptical of riding on an announcement that has yet to earn Congress blessings. In addition, the divergence between President Donald Trump’s promised rate of 15% for corporates and House Republicans’ proposal remains unresolved. This certainly marks strong event risk ahead for markets.

Asian markets are however set to continue benefitting from the rosy glow in overnight markets. Early movers in the region were last seen trending higher with the KOSPI up 0.26% and the Nikkei 225 close to 0.80% as of 9:00am Singapore time. The unwinding on positions in JPY continue to bolster the Nikkei and the expected lack of action from the BOJ clears the way for JPY selling as well. A packed day lies ahead for Asia with the release of Japan’s February all industry index, Singapore’s March industrial production due in the day. Key US earnings includes Procter & Gamble Co. and Boeing Co.

Yesterday: S&P 500 +0.61%; DJIA +1.12%; DAX +0.10%; FTSE +0.15%

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