Summary:
Investors' risk appetite remained strong, potentially leading to further Asian gains. Japan's Nikkei surpassed 39,000 for the first time in a month.
Tuesday saw investors remaining eager for riskier assets, hinting at possible gains across Asia. Notably, Japan's Nikkei index stayed above 39,000 points, marking its highest level in over a month.
The latest CFTC data show that speculators reduced their net short yen positions for a third week. The continuous slump in the currency, though benefiting exporters, began to prompt profit-taking in the stock market.
Many firms surveyed said they would not be able to hire enough workers if they kept wage growth low, a BOJ survey showed, signalling sustained price growth in the country and hence more rate hikes ahead.
The Nasdaq 100 closed at a record high on Monday and gold jumped to an all-time high as investors weighed hawkish statements from the Fed that pushed Treasury yields higher.
US equity investors' risk appetite grew to 28% in May from 5% in April, to reach its highest reading since Nov 2021, according to the latest results from S&P Global's Investment Manager Index survey.
The S&P 500 finished the session with a modest gain, while the Dow dipped below 40,000. Brokerages have raised their year-end targets for the S&P 500 on expectations of a soft landing and inflation under control.
Deutsche Bank raised its 2024 year-end target to 5,500 from 5,100, the highest among major brokerages, while Morgan Stanley forecast it would hit 5,400 by June 2025.
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