US indices rallied overnight delivering their best performance since June as bond yields retreated with economic data pointing to an end in the Feds tightening cycle. Almost 90% of the S&P500 closed higher led by the “tech mega-caps” as US 2-year treasury yields sank back below 4.9%. US job openings fell by more than expected to 8.83mn, another new 2-year low while consumer confidence fell amid a souring view towards jobs.
- We believe stocks are now heading to fresh 2023 highs led by tech which advanced +2.2% overnight with Tesla (TSLA US) catching the eye closing up +7.7%.
- However it should be noted that we do believe the rally by tech since Q4 of 2022 is maturing and is unlikely to meaningfully accelerate above the psychological 16,000 area.
MM is now bullish toward US equities short-term
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The HK China Index (Chinese stocks trading in Hong Kong) has corrected well over -20% from its 2023 high around fears that Beijing will fail to turn their economic ship around however at MM we believe the risk/reward is now firmly in the bulls corner with plenty of bad news already baked into this particular cake.
- We believe Xi Jinping et al will ultimately kick-start the Chinese economy which is bullish for their stocks and associated markets.
MM is now bullish on the HK China Index
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