Asia markets rise as Biden takes over

Asian equity markets join in presidential honeymoon

The FOMO buy everything trade was back in force overnight, with President Biden’s swearing-in unleashing another round of stimulus-powered buying. Morgan Stanley’s impressive earnings data and a huge by Netflix on their zero borrowing/buyback news added to the jovial mood on Wall Street. The S&P 500 finished 1.39% higher; the Nasdaq leapt 1.97% higher, and the Dow Jones finished a relatively sedate 0.83% higher. The rally has continued in Asia, with US Index futures powering higher once again.

Wall Street’s festive mood has spilt over into Asian markets, which are a sea of green today. The Nikkei 225 and Kospi are 0.90% higher. Mainland China’s Shanghai Composite and CSI 300 are 1.0% higher, and the Hang Seng has risen 0.30%. Singapore has climbed 0.20%, but Taipei has jumped nearly 2.0% this morning, and Bangkok is 1.0% higher. Australian markets have also rallied, with the All Ordinaries and ASX 200 rising by 0.75%.

Jakarta and Kuala Lumpur are lagging with the Jakarta Composite unchanged ahead of the Bank Indonesia decision. Likewise, the KLCI has edged 0.25% lower as the local market digested an unchanged rate decision by Bank Negara yesterday.

European equities are likely to open higher today as well, as momentum globally has swung back to the US stimulus-powered global recovery trade. That is likely to continue into the end of the week and into the next, until the Republican Senate reveals the level of cooperation they intend with the new president.

For all the excitement and positivity in the equity markets over the Biden USD1.9 trillion stimulus package, that we are writing about ad nauseum, one critical risk remains and is being totally ignored by financial markets everywhere. That risk is to what extent is the Republican minority in the US Senate inclined to bipartisanship. So far, the silence of the Republicans has been deafening as to how cooperative they intend to be with the Democrats.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.