Asian equities were mostly higher overnight as Hong Kong and Mainland China led gains in the region following the Memorial Day holiday in the US.
Asian equities were mostly higher overnight as Hong Kong and Mainland China led gains in the region following the Memorial Day holiday in the US. It was a good day for growth and technology stocks as stimulus expectations and a better-than-expected PMI release led investors back into some names. Baidu gained over +7% overnight after a positive earnings release on Thursday, discussed below. Purchasing Managers Indexes (PMIs) are diffusion indexes, meaning that any reading above 50 indicates expansion while any reading below 50 indicates a contraction. While the May PMI release indicates a contraction year-over-year, the readings were above expectations and April’s dismal reading. We can attribute the continuing contraction to falling global demand for China’s exports as global stimulus fades and the better-than-expected reading to pessimism regarding lockdowns in China, which appear to be showing signs of easing. Shanghai reported 30 COVID cases on Monday and none outside of quarantined areas. Meanwhile, Beijing reported 18 COVID cases. This represents the fewest cases reported in nearly three months.
