By Gina Lee
Investing.com – Asia Pacific stocks were up Thursday morning as inventors digested both U.S. President Joe Biden’s address to a joint session of Congress and the Federal Reserve’s latest policy decision.
South Korea’s KOSPI gained 0.55% by 10:31 PM ET (2:31 AM GMT), even as Samsung Electronics (OTC:SSNLF) Co. Ltd.'s (KS:005930) profit for the first quarter of 2021 topped forecasts. The company reported a 46% rise in first-quarter profit thanks to strong demand for smartphones and TVs even as a drop in chip earnings after a cut in U.S. output increased production costs. Operating profit also rose to KRW9.4 trillion won ($8.44 billion) for the quarter ended March 2021, up from 2020’s KRW6.45 trillion.
In Australia, the ASX 200 was up 0.40%.
Hong Kong’s Hang Seng Index jumped 1.11%. China’s Shanghai Composite edged up 0.14% and the Shenzhen Component was up 0.32%.
Japanese markets are closed for a holiday.
U.S. shares ended the previous session on a high note overall thanks to strong earnings from technology heavyweights. Nasdaq 100 futures outperformed after Apple Inc. (NASDAQ:AAPL) more than exceeded revenue estimates and Facebook Inc . (NASDAQ:FB) reported gains in sales and users.
The Fed kept its interest rate unchanged at 0.25% as it handed down its decision on Wednesday but did not offer any fresh clues as to the future direction of its monetary policy. Fed Chairman Jerome Powell also reiterated that the Fed would not trim asset purchases, currently at a monthly level of $120 billion, anytime soon.
However, some investors remained skeptical.
“You are seeing markets pricing in Fed rate hikes even though the Fed is signaling they don’t think they need to take action through 2023,” Natwest Markets chief U.S. economist and co-head of global economics Michelle Girard told Bloomberg.
The central bank’s view that inflation pressures are likely “transitory” did give U.S. Treasuries a boost during the previous session. However, strong corporate earnings are not enough to sustain the bullish momentum in global stocks and investors are already searching for the next catalysts.
The focus shifted to Biden’s address, his first in his role as president, which he started by declaring that the U.S. is “on the move again.” He also pushed for a new spending and tax-credit package, which together with an earlier infrastructure and jobs plan will cost the country around $4 trillion, but is a “once-in-a-generation investment.”
The Fed’s continued dovish stance and the prospect of more U.S. stimulus have raised investor’s expectations for both inflation and interest rates.
“We are looking at an economy that with the help of vaccinations is gathering momentum and yet we are continuing to see on the monetary and fiscal front the amount of support is ongoing,” said Natwest’s Girard.
Investors will also look to the U.S. GDP for the first quarter of 2021, which will be released on Friday, for further clues about the U.S. economic recovery from COVID-19.