Asia stocks rally, on US yield rebound and PBOC's policy reform
Following U.S. Treasury yields’ rebound from last week’s plunge,coupled with news of a key policy reform in China, Asia’s stocks inched higher Monday afternoon (Asia time).
The Shanghai composite climbed +1.47%, while the Shenzhen component gained +2.39%. The Shenzhen composite added +2.446%.
On Saturday, the People’s Bank of China announced a critical policy reform, as it intends to improve the process of forming the loan prime rate this month onward, in a way that’s apparently salutary to the economy. It said it will use “market-based reform methods” to reduce real lending rates – in a bid to spruce up economic growth in the nation. China’s economy has been plagued with slowing growth, with its ongoing trade war with the U.S. only worsening the situation apparently.
Hong Kong’s Hang Seng index also rose +1.87%, on the back of life insurer AIA’s stock climb of +2.57%.
In aggregate, the MSCI Asia ex-Japan index rose 1.02%.
Japan’s Nikkei 225 gained +0.66% as shares of convenience store operator FamilyMart surged +11.24%, while the Topix added +0.51%. South Korea’s Kospi advanced +0.72%.
Australia’s S&P/ASX 200 gained +0.74%.
Last Wednesday, concerns of recessionary forces in the U.S. surfaced as the yield on the 10-year Treasury note briefly dropped below the rate for the 2-year. The U.S. 30-year Treasury yield dropped to a record low and the yield on the benchmark 10-year notes fell to a three-year low last Thursday – a situation implying investors' rush to ‘safe haven’ U.S. fixed-income, while also heightening fears of yield curve inversion. Inversion has preceded an economic recession several times in the past.
But U.S. long-term Treasury yields got a boost last Friday, following reports that Germany would stimulate spending by issuing more debt. When a government increases its bond sales, the yields tend to go up to create demand for the additional supply of bonds. The yield on the benchmark 10-year Treasury note was at 1.5826%, while the rate on the 30-year Treasury bond was at 2.071%.
Momentum Indicator for MCHI turns negative, indicating new downward trend
MCHI saw its Momentum Indicator move below the 0 level on December 03, 2024. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 91 similar instances where the indicator turned negative. In of the 91 cases, the stock moved further down in the following days. The odds of a decline are at .
Technical Analysis (Indicators)
Bearish Trend Analysis
MCHI moved below its 50-day moving average on November 12, 2024 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for MCHI crossed bearishly below the 50-day moving average on November 19, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where MCHI declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for MCHI entered a downward trend on November 18, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 67 cases where MCHI's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where MCHI advanced for three days, in of 269 cases, the price rose further within the following month. The odds of a continued upward trend are .
MCHI may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
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Category PacificAsiaexJapanStk