​EBC Markets Briefing | Japan stocks set new record; Intel shares boomed

The Nikkei 225 hit another record high despite higher oil prices. Japan's manufacturing activity expanded at its strongest pace in four years in April as firms boosted production over concerns about potential supply shortages.

A second round of peace negotiations between the US and Iran unravelled again. Iran's Revolutionary Guard also reportedly boarded two cargo ships near the Strait of Hormuz.

Japanese stocks attracted significant foreign investor inflows in the week through 18 April, driven by a rally in AI-related stocks as risk sentiment improved on ‌hopes of a resolution to the Middle East conflict.

Goldman Sachs noted that the stabilization of the yen was also driving this shift. Policymakers are unlikely to tolerate a sharp depreciation of the yen to near its current level of 160 per dollar or below.

Despite that, the disruption to oil supply in resource-poor Japan has clouded the outlook for corporate earnings. Nomura Securities' Revision Index of earnings ⁠estimates has fallen to 13, the lowest since September.

Greg Abel is moving decisively at Berkshire Hathaway, now overseeing almost all of the company's $300 billion stock portfolio. He has channelled new funds toward Japanese investment like Buffett.

The Nikkei 225 did not shown signs of overbought, so the path of least resistance remained upside. We expect the index to smash 61,000 in the near term.

Asset recap

As of market close on 24 April, among EBC major products, Intel shares led gains. They rose to a record high after the US chipmaker's results added to confidence that its ambitious turnaround plan was paying off.

Comcast topped revenue and earnings estimates for Q1, lifted by NBC's sports slate in February and improving broadband customer losses. But Deutsche Bank downgraded the stock to "Hold" rating.

A scorching US stock rally faces a test from a mammoth week of corporate results led by major technology companies. The Fed is widely expected to hold interest rates steady in its policy statement on Wednesday.

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