Trading hours were shortened in Hong Kong and Sydney due to Christmas Eve, stock prices oscillated between rises and falls in Japan, and fell slightly in Australia. US stock futures were little changed in Asia after the Magnificent Seven technology mega-cap index rose 1.4% on Monday, offsetting weaker-than-expected US consumer confidence data.
“This has been a noisy time of year with very few signals in price movements,” said Kyle Rodda, senior market analyst at Capital.com. “The rest of the week is likely to be uneventful with another very quiet day in the region as a high percentage of the market logs off for the holidays.”
MSCI’s Asian equity benchmark is facing its first quarterly loss since September 2023, down 7.1% over the same period, even as the S&P 500 rose 3.7%. Sentiment has worsened in Asia in recent months due to concerns about U.S. President-elect Donald Trump’s threat of higher global tariffs, a strong dollar and China’s lackluster economic recovery.
The 10-year U.S. Treasury yield was little changed on Tuesday at 4.58%, while the Bloomberg Dollar Index rose 0.1%, staying at its highest level in nearly two years after the U.S. government shutdown averted.
Nissan Motor Co.’s stock price fell as much as 7.3% in the Tokyo market after the company confirmed that it is in talks with Honda over a possible business merger. Honda stock rose 14%. According to South Korean data released on Tuesday, consumer confidence has declined this month due to the political turmoil sparked by President Yun Seok-Yeol’s declaration of martial law and impeachment, and the impact of the coronavirus pandemic. This was the biggest drop since the outbreak. This will raise concerns that consumer spending will slow further and raise speculation that the Bank of Korea may consider cutting interest rates in January. Australia’s central bank said it had growing confidence that inflation was sustainably on track to target, but given the recent recovery in consumption and a still-tight labor market, the battle was won. The minutes of the December meeting showed that it is still too early to conclude that
On Wall Street, the S&P 500 index rose 0.7% on Monday, the Nasdaq 100 index rose 1% and the index of U.S.-listed Chinese stocks rose 0.9%.
“Despite recent profit-taking, the stock market’s main uptrend remains intact,” Piper Sandler’s Craig Johnson said. “Given the short-term oversold conditions, we expect a ‘Santa Claus Rally’ to be likely this year.”
The S&P 500 has posted impressive annual returns and is on track to record back-to-back gains of 20% or more. The index is up about 25% since the end of 2023, with the top seven technology stocks accounting for more than half of the gains.
Whether this gauge can ignite a “Santa Claus Rally” remains a barometer of investor optimism heading into the new year. These seven days include the last five business days of the old year and the first two days of the new year.
The oil market remained in thin trading ahead of the holidays, with the focus on the strong dollar and the turmoil in international politics caused by President-elect Donald Trump. Gold has a higher edge.
