“Asia-Pacific’s equity rally augurs a bright earnings outlook for Y 2021, strategists are upbeat across the board”— Paul Ebeling
Citigroup Inc., Goldman Sachs Group Inc. and Nomura Holdings Inc. have penciled in earnings growth of more than 20% for Asian shares in Y 2021.
Citi and Nomura are joined by Societe Generale SA in expectations for between a 5% and 7% rise in the MSCI Asia sans-Japan Index, while Goldman sees a 9% jump in the Asia-Pacific equivalent in Y 2021.
“We remain optimistic about 2021 prospects driven by the macro and earnings recovery and would be buyers of any market pullbacks,” a team of Goldman strategists wrote in a note published Sunday.
Asian stocks are finishing this year in strong fashion with the MSCI Asia sans-Japan erasing its pandemic-related losses in the Summer and surging to a 18% YTD rise through Monday. Benchmarks in technology-heavy South Korea and Taiwan led the advances.
The prospects for profit growth looks strongest in SKorea, Citi analysts wrote in a note last week, projecting a 43% jump in EPS growth for Korean stocks in Y 2021.
Sector-wise, earnings growth is shifting to cyclical sectors, such as financials and materials, SocGen analysts wrote in a note published last month.
Further boosting returns in Asian equities next year will be expectations of an earnings recovery in Y 2022, according to Goldman.
“With strong market returns this year and full valuations, the market has priced next year‘s earnings recovery: 2022 earnings will be the primary driver of 2021 returns,” the Goldman team wrote, expecting regional earnings to grow at 16% in that year.
Monday, the benchmark US major stock market indexes finished at: DJIA -184.82 to 29861.49, NAS Comp +62.17 at 12439.95, S&P 500 -15.97, 3647.50
Volume: Trade on the NYSE came in at 1.0-B/shares exchanged.
HeffX-LTN’s overall technical outlook for the major US stock market indexes is Bullish with a Very Bullish bias in here, there is no overhead resistance on the SPY, support is strong and deep + today’s action produced a doji.
- NAS Comp +38.6% YTD
- Russell 2000 +14.7% YTD
- S&P 500 +12.9% YTD
- DJIA +4.6% YTD
Looking Ahead: Investors will receive Industrial Production and Capacity Utilization for November, the Empire State Manufacturing Index for December, Export and Import Prices for November, and Net Long-Term TIC Flows for October Tuesday.
Have a healthy week, Keep the Faith!