Global stocks kick off the Year of the Ox with the Nikkei 225 soaring to a three-decade high amid a holiday-shortened trading week
- The Nikkei 225 soared to 30,000 for the first time since 1990
- US markets are shut for Presidents’ Day, while exchanges in China, Hong Kong and Taiwan are also closed on Monday
Global stocks began the week with gains amid signs the reflation trade has further to run and as the pace of coronavirus outbreaks slowed. WTI crude breached US$60 dollars a barrel as an arctic freeze gripped parts of the US.
South Korean and Japanese shares led Asia higher, with the Nikkei 225 hitting 30,000 for the first time since 1990. Data showed Japan’s economy grew by double-digits last quarter, beating expectations. S&P 500 and European futures pointed to gains.
US markets are shut for Presidents’ Day, while exchanges in China, Hong Kong and Taiwan are also closed on Monday. The dollar retreated.
The reflation trade remains alive and well – global equities have risen for 10 straight sessions, and the Treasury yield curve tested the steepest levels in more than five years. Investors are banking on US government spending and the coronavirus vaccine roll-out to boost the economic recovery, though new variants are threatening to temper the outlook.
“The reflation trade is set to continue to gather steam with vaccine deployment and massive fiscal spending by the Biden administration,” said Esty Dwek, head of global market strategy for Natixis Investment Managers Solutions. “Yields are likely to rise further and the catch-up of cyclical sectors should continue.”