The Asian economy is rallying. What about the U.S.?
Asian shares rallied on Monday, boosted by a cautious optimism about a global economic recovery. The Japanese government is expanding its measures against coronavirus cases to more parts of Japan from the specific cities and areas, starting Tuesday. However, the cities of Tokyo and Osaka call such strengthening of rules a “state of emergency.” Japan has never had a lockdown.
On Monday, Japan’s benchmark Nikkei 225 NIK, +0.01% fluctuated between slight gains and losses. It climbed up by 0.2% at last. Japanese Prime Minister Yoshihide Suga and U.S. President Joe Biden attended the summit over the weekend. Suga also asked the Pfizer chief executive to ensure a steadier supply of the company’s coronavirus vaccine. Thus far, Japan has lagged in other nations in a vaccine rollout, with barely 1% of its population inoculated so far.
South Korea’s Kospi 180721, +0.01% also gained 0.4%, while Australia’s S&P/ASX 200 XJO, +0.03% soared by 0.2%. The Shanghai Composite SHCOMP, +1.49% jumped by 1.3%. Moreover, Hong Kong’s Hang Seng HSI, +0.47%, added 1.2 %.
Furthermore, stocks rallied in Taiwan Y9999, +0.61%, and Singapore STI, +0.25%, but tumbled down in Indonesia JAKIDX, -0.55%.
The promised Covid-19 vaccine after Suga’s U.S. visit works as an advantage for Japan. However, their agreement to take a stricter stance on China adds to investor concerns because of China’s importance for the Japanese economy – stated Yoshimasa Maruyama, the chief market economist at SMBC Nikko Securities.
How did the U.S. market fare?
U.S. stocks have also rallied during the last weeks, boosted by a string of encouraging job reports and consumer spending, both of them accelerating the U.S. economy. COVID-19 vaccinations are already reaching half of the U.S. population. Furthermore, massive support from the U.S. government and the Fed bolstered expectations for substantial corporate profit growth as more businesses reopen.
The S&P 500 and Dow Jones Industrial Average both reached new highs during the last week. The S&P 500 SPX, -0.32% rallied by 0.4% to 4,185.47, thanks to the gains in companies that rely directly on consumer spending, banks, and health care stocks. The Dow DJIA, -0.27% also jumped by 0.5% to 34,200.67.
