Asia-Pacific Market Weekly Report: MXAPJ fell 2%, bullish retracement and FOMC hawkish minutes were the main reasons, focus on reflation beneficiaries (Goldman Sachs)
Goldman Sachs' Asia-Pacific weekly report shows that the MXAPJ index fell 2% last week, with the technology-heavy market bearing the brunt and being hit by multiple factors such as position unwinding, momentum reversal, foreign capital outflows, tensions in th
Goldman Sachs' Asia-Pacific weekly report shows that the MXAPJ index fell 2% last week, with the technology-heavy market bearing the brunt and being hit by multiple factors such as position unwinding, momentum reversal, foreign capital outflows, tensions in the Middle East and the hawkish FOMC meeting minutes. Against this background, Goldman Sachs highlights that investors turn to reflation-benefiting sectors such as financials, construction and department stores, believing that their profits will widely spill over as the economy recovers. The market's enthusiastic pursuit of AI and technological innovation has masked improvements in cyclical sectors, and Goldman Sachs believes that earnings upward revisions in these traditional sectors are coming. One-sentence conclusion: The correction in Asia-Pacific technology stocks is healthy, and the market focus is turning to the beneficiaries of reflation as profit growth spills over; cyclical sectors such as finance and construction will be the winners and losers in the next stage. Positive/negative: Positive for the financial, construction and consumer sectors in the Asia-Pacific region. It is negative for AI concept stocks that are overvalued in the short term. The market still lacks expectations for the earnings improvement of cyclical sectors, and there is a significant expectation gap. Catalysts: 1) Financial report data of financial and construction companies in the region; 2) China's credit and infrastructure investment data; 3) The impact of the Federal Reserve's policy shift on liquidity in emerging markets.