Asia off to slow start, lot of easing already priced in
By Wayne Cole
SYDNEY (Reuters) — Asian shares got off to a slow start on Monday in what will be a holiday-shortened week and with market valuations looking a little stretched given they have already priced in aggressive global policy easing for next year.
The Black Friday sales will test the pulse of the consumer-driven U.S. economy this week, while the Thanksgiving holiday will make for thin markets.
There were media reports Israel, the United States and Hamas had reached a tentative agreement to free dozens of hostages in Gaza in exchange for a five-day pause in fighting, but no confirmation as yet.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1%, having climbed 2.8% last week to a two-month high.
Japan's Nikkei was little changed, and is up almost 9% for the month so far amid upbeat corporate earnings.
S&P 500 futures eased 0.1% and Nasdaq futures lost 0.2%. The S&P is now up nearly 18% for the year and less than 2% away from its July peak.
Yet analysts at Goldman Sachs note the «Magnificent 7» mega cap stocks have returned 73% for the year so far, compared with just 6% for the remaining 493 firms.
«We expect the mega-cap tech stocks will continue to outperform given their superior expected sales growth, margins, re-investment ratios, and balance sheet strength,» they wrote in a note. «But the risk/reward profile is not especially compelling given elevated expectations.»
Tech major Nvidia (NASDAQ:NVDA) reports quarterly results on Tuesday, and all eyes will be on the state of demand for its AI related products.
The flow of U.S. economic data turns to a trickle this week, but minutes of the Federal Reserve's last meeting will offer some colour on policy makers' thinking as they held rates
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