Shares of smaller companies that have lagged for most of 2023 are drawing investors on both sides of the Atlantic, as they weigh the benefits from an expected fall in interest rates next year against worries about a possible economic downturn. In the U.S., the small-cap Russell 2000 has jumped over 13% from its October lows, while the MSCI Europe Small and Mid Cap Index is up 12% since late last month. While the S&P 500 is up 19% year-to-date, the Russell 2000 has climbed just 5%.
Bond yields, interest rate expectations, oil prices and inflationary pressures around the world are falling, and the conviction behind this broad-based move appears to be strengthening. That's the backdrop to the Asian market open on Thursday, but it won't necessarily boost investor sentiment or power a rally in risk assets like emerging market stocks. The Asia Pacific economic calendar on Thursday includes indicators that will shine a regional light on these issues and concerns, as well as FX reserves figures for five countries including China.
Bond yields, interest rate expectations, oil prices and inflationary pressures around the world are falling, and the conviction behind this broad-based move appears to be strengthening. That's the backdrop to the Asian market open on Thursday, but it won't necessarily boost investor sentiment or power a rally in risk assets like emerging market stocks. The Asia Pacific economic calendar on Thursday includes indicators that will shine a regional light on these issues and concerns, as well as FX reserves figures for five countries including China.