Asian economies are far from being on a clear path to recovery.
The Dow and S&P 500 are both at record highs, with both up more than 10% so far this year. U.S. stocks continue to report strong first quarter earnings. But after this year’s big rally in U.S. stocks and record highs, corporate earnings reports need to be followed by higher standards before they are enough to drive stocks higher.
Recently, Asian stocks have rekindled concerns about whether the New Guinea (CCP virus) epidemic is making a comeback. Asian stocks have been underperforming other global markets since early March, hit by a surge in cases in Japan and India, which were expected to benefit from the accelerating recovery of the global economy.
The World Health Organization said the number of new coronary infections is rising in all regions of the world except Europe, and the region with the largest increase in the number of cases last week was Asia, with India taking the brunt of the increase, with more than 270,000 confirmed cases in a single day on April 19.
In a statement, the State Department said it will place 80 percent of the world’s countries on the highest level of travel alert, or “Level 4,” in the near term, urging people not to travel. The travel advisory is based on the U.S. Centers for Disease Control and Prevention’s assessment of the health situation in each country.
Japan is preparing to declare a state of emergency in Osaka and Tokyo as the number of confirmed cases of the variant virus soars again. India, for its part, is facing a second wave of new crown outbreaks. the MSCI Asia Pacific Index has fallen below the relative uptrend it has been in since last September and has underperformed the MSCI Developed Markets Index by 5% since early March.
The market may have underestimated the impact of the variant of the virus that emerged in India on other Asian economies, which, coupled with the latest U.S. travel alert, suggests that Asian economies are far from being on a clear path to recovery, and with Asian funds being hit by another outbreak, things are not looking good for Asia-Pacific stock markets.
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