Last week’s selling was heavy, and many shorter-term speculative positions will have been cleaned out. The MSCI World and Nasdaq both posted their biggest losses in 10 weeks, and the MSCI Asia ex-Japan index had its worst week since June 2022.
World stocks snapped a four-day losing streak on Monday while Asian stocks climbed for a second straight day, a surprisingly rare feat over the past six weeks.
Perhaps the pendulum has swung a little too far.
Investors may also be reluctant to take firm directional bets ahead of Nvidia’s results on Wednesday. The semiconductor giant, at the vanguard of the global AI frenzy, is the world’s most valuable company, and an earnings ‘beat’ or ‘miss’ will help set the global market tone for the rest of the week and probably year.
The local calendar in Asia on Tuesday is light. The main highlight will be the Reserve Bank of Australia‘s minutes of its last policy meeting, where it kept the cash rate steady at 4.35% and signaled the need to remain “vigilant” to upside inflation risks.
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