· U.S. stocks’ run up so far this year could end as soon as this quarter, a strategist from J.P. Morgan Asset Management warned on Thursday.
A potential sell-off would be driven by a downward revision in earnings forecasts for next year, predicted Jasslyn Yeo, global market strategist at the asset management giant. Analysts currently expect earnings to grow around 14% in 2020, which looks “pretty high” given the weak global economic outlook, she said.
Yeo is not the only strategist who has predicted an upcoming correction in stock prices. Earlier this month, Ian Harnett, chief investment strategist at Absolute Strategy Research, told CNBC a “really sharp correction” could come within the next 18 months.
· European stocks were higher Thursday morning, after soft economic data bolstered expectations of a rate cut from the European Central Bank (ECB).
The pan-European Stoxx 600 was up around 0.4% shortly after the opening bell, with most sectors and major bourses in positive territory.
· Asian shares rose after a cautious start, while the euro hovered near two-month lows as soft economic data fueled hopes the European Central Bank could cut rates at its meeting on Thursday.
MSCI’s broadest index of Asia-Pacific shares outside Japan, which had begun the day broadly unchanged, was last up 0.23%.
“Lower rates are generally, in a traditional, mechanical way, good news for equity prices,” said Jim McCafferty, head of equity research, Asia ex-Japan, at Nomura.
Chinese blue-chips added 0.48%, as investors looked with hope to a face-to-face meeting between top U.S. and Chinese negotiators next week, even if there are few signs that it will produce real progress in the two countries’ trade war.
· Japanese stocks rose on Thursday after Wall Street climbed to record highs, although the gains were modest as investors showed restraint ahead of policy decisions by the European Central Bank later in the day and the Federal Reserve next week.
The Nikkei share average ended the day up 0.22 per cent at 21,756.55 after touching 21,823.07, its highest since May 7.
The ECB is seen easing policy further on Thursday and the Fed is widely expected to lower interest rates by 25 basis points (bps) at its July 30-31 meeting.
· China stocks ended higher on Thursday, bolstered by technology shares, even as investors cheered potential progress in Sino-U.S. trade talks.
The blue-chip CSI300 index rose 0.8%, to 3,851.07, while the Shanghai Composite Index gained 0.5% to 2,937.36.
Top U.S. and Chinese negotiators will meet face-to-face next week for the first time since Presidents Donald Trump and Xi Jinping agreed to revive talks to end their year-long trade war.
Reference: CNBC, Reuters
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