Asian Shares Hit Record On Valuations, Silver Dips: Markets Wrap

Asian shares climbed to a record, buoyed by optimism over earnings and regional economic growth as investors broadened their focus beyond US markets.

The MSCI Asia Pacific Index advanced 1.2% to an all-time high, with most subsectors gaining. Asian shares have outpaced the S&P 500 this year, even as the US benchmark also rose to a record. Amid the buoyant mood, silver slipped 1.2% and spot gold steadied after a rally that sent the precious metals to all-time highs.

Much of the early action was in Japan, where stock gauges jumped and bond yields surged upon returning from a holiday amid speculation that Prime Minister Sanae Takaichi might dissolve the parliament as soon as next month. The yen fluctuated after Finance Minister Satsuki Katayama said she told US Treasury Secretary Scott Bessent that she’s concerned about one-way yen moves.

Asian shares, relatively cheaper even after three years of gains, face key risks this week from US inflation data and a possible Supreme Court ruling on President Donald Trump’s tariffs. The momentum in stocks suggested investors are looking beyond the US, where renewed attacks by the Trump administration on the Federal Reserve have raised concerns over central-bank independence.

“Non-US assets such as European and Asian equities are likely to look more favorable, especially due to cheaper valuations and as US foreign policy becomes more unpredictable,” said David Chao, global market strategist at Invesco Asset Management, which oversees more than $2 trillion.

Asian shares are cheaper compared with US benchmarks. The MSCI Asia Pacific Index trades at about 15 times earnings, compared with about 22 times for the S&P 500 and 25 times for the Nasdaq 100, according to data compiled by Bloomberg.

Elsewhere, Treasuries and a gauge of the dollar steadied after declining during the US session as the Trump administration escalated its attacks on the Fed. On Sunday, Fed Chair Jerome Powell said the central bank had been served grand jury subpoenas from the Justice Department threatening a criminal indictment.

What Bloomberg strategists say...

Asian stocks are extending their recent strong run, with an additional tailwind from investor unease about the Powell-DOJ saga which hangs over US markets. Investors looking for an AI-narrative have plenty of choice in Asia with Chinese, Korean, Japanese and Taiwanese companies all in the forefront of developments.

— Mark Cranfield, MLIV strategist.

Fund managers at big bond firms such as Pacific Investment Management Co., PGIM and DWS Group have warned that Trump’s assault on the Fed is at odds with his goal of pulling down interest rates. Instead, the pressure is adding a new risk into markets that could push bond yields higher.

The latest salvo between the Trump administration and the Fed comes as investors navigate a chaotic backdrop.

The president has taken aim at credit card companies, homebuilders and defense contractors — while also considering a US role in the Iranian protests after capturing Venezuela’s leader earlier in January. Late Monday, Trump said he would impose a 25% tariff on any country that’s “doing business” with Iran, sending crude oil higher.

“After shrugging off last week’s geopolitical surprises, US markets face domestic political headlines,” said Chris Larkin at E*Trade from Morgan Stanley. “Barring additional surprises, the markets will likely turn their attention to earnings and inflation data.”

The US core consumer price index, regarded as a measure of underlying inflation because it strips out volatile food and energy costs, is seen rising 2.7% in December from a year earlier.

Fourth-quarter US earnings, meanwhile, kick off in earnest later this week and are expected to show healthy performance, according to Michael Casper and Wendy Soong at Bloomberg Intelligence.

Based on current estimates, S&P 500 constituents are expected to deliver earnings growth of 8.4% in the fourth quarter and 14.6% in 2026. Excluding the “Magnificent Seven” megacaps, profit growth is projected at 4.6% and 13.3%, respectively, they said.

Corporate News:

• Citigroup Inc. is set to cut about 1,000 jobs this week as part of Chief Executive Jane Fraser’s march to keep a lid on costs and improve returns at the Wall Street bank.

• BlackRock Inc. is cutting hundreds of jobs across the company, becoming the latest Wall Street firm to rein in headcount in recent weeks.

• Alphabet Inc.’s Google confirmed that it has entered a multiyear deal with Apple Inc. to power the iPhone maker’s artificial intelligence technology.

• A debt advisory firm asked China Vanke Co. dollar bondholders to consider calling a default on the embattled developer’s notes.

• Tata Consultancy Services Ltd.’s quarterly earnings missed analysts’ estimates, as corporations continue to limit spending on information technology projects.

• SK Hynix Inc. plans to spend 19 trillion won ($12.9 billion) building a new advanced chip packaging facility.

Stocks

• S&P 500 futures fell 0.1% as of 10:53 a.m. Tokyo time

• Japan’s Topix rose 2.2%

• Australia’s S&P/ASX 200 rose 0.9%

• Hong Kong’s Hang Seng rose 1.7%

• The Shanghai Composite was little changed

• Euro Stoxx 50 futures rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.1660

• The Japanese yen fell 0.2% to 158.45 per dollar

• The offshore yuan was little changed at 6.9727 per dollar

Cryptocurrencies

• Bitcoin rose 0.1% to $91,069.59

• Ether rose 0.1% to $3,094

Bonds

• The yield on 10-year Treasuries was little changed at 4.18%

• Japan’s 10-year yield advanced five basis points to 2.140%

• Australia’s 10-year yield was little changed at 4.70%

Commodities

• West Texas Intermediate crude rose 0.4% to $59.73 a barrel

• Spot gold fell 0.3% to $4,582.42 an ounce