But investors on Tuesday in the United States showed a more positive overall view. Growth, wages and other measures of economic health in the United States remain healthy, giving investors reasons to start buying stocks again.
“As we look forward, the market drivers of better economic prospects and higher profits have not changed at all,” Steve M. Duryee, a portfolio manager at Morgan Stanley’s Bergman Continuum Group, a wealth management firm, said in an email to clients.
By many measures, Asia’s performance also remains strong. China’s economy has revved up again, while Japan’s economy has ticked up a notch. Improved economic performance around the world has sharpened the appetite for products made in Asia’s exporting factories.
Still, the global economy faces challenges, and investors signaled they were not ready to continue the stock run-up that had characterized global markets in recent months. Japan’s stock market rose by a hair, while Hong Kong’s fell less than 1 percent and South Korean shares fell 2.3 percent. An index of Chinese company shares traded in Hong Kong fell 2 percent.
The longer-term challenge for Asian economies will be whether higher interest rates in the United States would lead to a significantly broader tightening of credit. China in particular has turned to credit to keep its economic engine humming. While China’s tight control of its financial system makes it less vulnerable to headwinds from the outside, broadly tighter credit could still have an effect.
Still, if markets avoid sharp gyrations, borrowers should be confident enough to continue ladling on debt, Daiwa Capital Markets said in a note to investors.
“Within weeks or months,” it said, “the light for the party would be switched on again.”
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