Global equities are at the upper end of their "fat and flat range," according to Goldman Sachs, who downgraded stocks to "underweight" on Monday as part of its 3-month asset allocation.
The bank remains "neutral" on equities over a 12-month period and continues its "overweight" position in cash. The downgrade comes after a rally in risk assets over the past few weeks driven by the U.K.'s vote to leave the European Union on June 23 and the search for yield amid expectations of easing. But Goldman suggests equities are now expensive and with weaker-than-expected earnings growth it views this as the right time to downgrade.
Asian shares edged lower in early trading on Tuesday, taking their cues from a modestly lower day on Wall Street as U.S. crude oil prices slid.
The Reserve Bank of Australia's policy board will decide on Tuesday whether rates should be left at 1.75 percent or trimmed a quarter point to a new record low, with most analysts predicting the need to combat low inflation and a rising currency will win the argument for more stimulus. Not all commentators, however, are convinced the RBA will announce a rate cut when its decision is made public at 0430 GMT
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.2 percent in early trading.
Prime Minister Shinzo Abe's cabinet is likely to approve a 28 trillion yen ($273 billion) stimulus package on Tuesday, though direct fiscal spending will total only about 7 trillion yen, according to two people briefed on the matter.
The S&P 500 and the Dow closed slightly lower on Monday, as a drop in oil prices dragged down energy stocks, while tech names Apple and Alphabet helped lift the Nasdaq to its highest close in over a year.
The S&P 500 had hit a record high earlier in the session, but was unable to hold gains as U.S. crude CLc1 slumped to below $40 a barrel, its lowest level since April, before settling at $40.06.
The Dow Jones industrial average .DJI fell 27.73 points, or 0.15 percent, to 18,404.51, the S&P 500 .SPX lost 2.76 points, or 0.13 percent, to 2,170.84 and the Nasdaq Composite .IXIC added 22.07 points, or 0.43 percent, to 5,184.20.
Reference: Reuters
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