Risk demand could wane further in the near term
US stocks finished mixed and little changed on Wednesday after a two-day winning streak, with the S&P 500 and Nasdaq Composite advancing for a third straight session. The S&P 500 added about 0.1% to see the highest closing level in nearly two weeks. The tech-heavy index also gained 0.1%, while the Dow Jones shed 0.1%. for the week so far, he S&P 500 is up 2.1%, the Dow is up 1.2%, and the Nasdaq adds 2.8%. On the data front, US S&P Global composite PMI declined to 50.9 in April from 52.1 in the previous month.
In Asia, equities were mostly lower on Thursday as investors turned more cautious in anticipation of global earnings reports and fresh economic data out of the US, including PCE figures that could affect Fed rate cut expectations. Japan’s benchmark Nikkei 225 managed to erase early losses and finished 0.04% higher, with focus turning to the Bank of Japan, whose two-day monetary policy meeting started today. South Korea’s Kospi dropped nearly 1.8%. Hong Kong’s Hang Seng gained 0.48%, while the Shanghai Composite edged 0.27% higher. Trading was closed in Australia for a national holiday.
European stocks opened lower on Thursday as investors nervously awaited fresh corporate earnings. Today, earnings are set to come from Deutsche Bank, Barclays, Nestle and Airbus. The pan-European benchmark Stoxx 600 index was down 0.24% in early deals, with tech stocks leading the losses, thus affecting US futures. Wall Street stock index futures are mostly down in early pre-market deals, suggesting risk demand could wane further in the near term. Now, investors shift focus to the US GDP report that will set the tone for markets during the US trading session.
Meanwhile, the US dollar is back under pressure after a short-lived bounced witnessed during the previous session. The USD index derailed the 105.60 local support zone, looking set to challenge the 105.50 region, a decisive break below which would open the way towards the 105.00 figure last seen two weeks ago. However, should the upcoming US economic data surprise to the upside, the buck may regain the upside momentum to retarget the 106.00 mark. The overall bullish trend remains intact for the time being.