- Asia stocks are flashing green after record highs in US stocks.
- Dovish central bank expectations likely pushing equities higher.
Asian stocks are flashing green this Thursday morning as shares on Wall Street rose to record highs in the overnight trade.
As of writing, Japan’s Nikkei is reporting 0.21% gains at 21,684 and the Shanghai Composite is adding 0.20% at 3,021. Stocks in Hong Kong, Australia and New Zealand are also reporting gains, while those in South Korea are trading flat to negative.
Notably, Australian shares have surged to their highest level in over 11.5 years on expectations that the Reserve Bank of Australia would cut rates further and the Us Federal Reserve will soon join the rate cut party.
The US stocks were solidly bid in the overnight trade with the Dow Jones Industrial Average adding 179.32 points to end the day at record closing high of 26,966. Both Nasdaq Composite and the S&P 500 also rose 0.7%.
Risk assets seem to have picked up a bid this week in response to the US-China trade talks.
Also, the widespread belief that the new appointees to the Federal Reserve – Christoper Waller and Judy Shelton – will advocate further stimulus could be pushing global equities higher.
Last month, the US Federal Reserve opened the doors for rate cuts by removing the word “patient” from its forward guidance on interest rates.
Investors will not be watching for the US non-farm payrolls report scheduled for release on Friday.
A weaker-than-expected data would only reinforce dovish Federal Reserve expectations, further adding to the bullish tone around the stocks.
Analysts at Goldman Sachs, however, believe the US government policy uncertainty and poor earnings outlook will keep the stock market from rallying further this year.
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