(Bloomberg) — Asian stocks are set to end the week on a high as a rally in the world’s largest technology companies fueled a rebound on Wall Street. 

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Equity futures in Australia, Japan and Hong Kong point to early gains after the S&P 500 snapped a two-day losing streak as bond-market volatility abated. The Nasdaq 100 closed at an all-time high as Apple Inc. climbed on an analyst upgrade and Taiwan Semiconductor Manufacturing Co.’s outlook lifted chipmakers on hopes for a global tech recovery in 2024.

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Stock traders were unfazed by data underscoring labor-market strength at a time when Fed officials are looking for signs of a slowdown as they contemplate cutting rates. Fed Bank of Atlanta President Raphael Bostic urged policymakers to proceed cautiously given the potential impacts of unpredictable events from elections to global conflicts. His Philadelphia counterpart Patrick Harker said he expects inflation to keep ebbing toward the target. 

The dollar and policy sensitive two-year Treasury yields were steady Thursday as investors paused following this week’s frenetic repricing of the outlook for the Fed’s policy. Traders see the prospect of a rate cut in March at little more than a coin toss, down from almost 80% at the end of last week after hawkish Fedspeak and data indicating the American consumer remains resilient. 

“Given the underlying strength of the US economy, it’s difficult to get too bearish at this point,” said Chris Zaccarelli at Independent Advisor Alliance. “The pervasive pessimism and doubt about the stock market and economy is a contrarian signal and one of the best reasons to push against the crowd. Once the last skeptic has been converted, the market will be again vulnerable to a large shock, but we aren’t at that point yet.”

Coming off its best winning streak in two decades, the S&P 500 has run into a roadblock in 2024, with its all-time closing record set two years ago remaining elusive. But a technical gauge that measures the momentum to buy or sell stocks signals that bulls are still stepping in to snap up shares. 

The index’s DVAN trend line — a proprietary divergence analysis that measures buying or selling pressure — has been on a buying streak since the S&P 500 bottomed in late October, with investors continuing to scoop up shares in multiple trading sessions heading into the closing bell in the past week.

“There’s clearly a desperate desire to cling on to the optimism that enabled such a strong end to the year, but unlike in that period, the data isn’t really playing ball,” said Craig Erlam at Oanda. “The releases we’ve seen so far this month have been fine and in the main, perfectly in keeping with the expectations people had coming into 2024. But is that enough?” 

Elsewhere, oil rose 2.1% to settle above $74 a barrel for the first time this year, bolstered by geopolitical risks as the US struck more than a dozen Houthi missiles in Yemen. Gold edged higher.   

Corporate Highlights:

Key events this week:

Stocks

Currencies

Cryptocurrencies

Bonds

Commodities

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Rita Nazareth.

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.



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