Equities are getting a fresh lease of life since trading last week and the mood is continuing despite the fact that the bond rout is deepening further. Japanese stocks put on a stellar shift, with the Nikkei climbing 3% to above 28,000 for the first time since 18 January.
Meanwhile, US futures are also up about 0.2% and that is keeping the market mood relatively more positive after the optimistic showing yesterday.
It's quite a remarkable showing from dip buyers especially as the Fed ended QE around the middle of the month and also as money markets are now pricing in over 70% odds that we will get a 50 bps rate hike in May.
Higher yields tend to be the bane of tech stocks but it hasn't proven to be the case in the latest upside leg.
I'm not entirely convinced of the optimism in equities but then, we've been here before. When doubts grew heavily during the pandemic, stocks were unrelenting as investors fed on dose after dose of easy money. The drug is gone now but then, a lot of the fears surrounding tighter policy has already been accounted for as well. The question now is, is that enough?
