Investors’ appetite for stocks and risk assets shows no sign of waning which, in the absence of any major market-moving economic data or events in Asia on Tuesday, should pave the way for further gains across the continent when trading gets underway.
Monday’s global market moves encapsulated the ‘FOMO’ that seems to be fueling the ongoing risk rally – volatility, the dollar, bond yields and geopolitical uncertainty all rose to varying degrees, yet equities marched higher regardless.
‘Fear of missing out’ – which some might say isn’t all that far removed ‘irrational exuberance’ – is a powerful force. But it can also be a red flag, especially when long-time market bears join the frenzy.
Morgan Stanley’s U.S. equity strategist Mike Wilson has not been the only Wall Street bear over the last couple of years, but he has certainly been one of the most prominent.
On Monday, he and his team raised their base-case, 12-month forecast for the S&P 500 to 5400 points. That’s only up around 2% from Friday’s close, but 20% higher than their previous forecast of 4500.
Only time will tell if Wilson’s about-turn will be an indication that investors’ exuberance has become irrational. Right now, however, at least until chipmaker Nvidia’s earnings on Wednesday, market bulls are firmly in control.
And Asia is enjoying the ride too.
