Nikkei Hits Highest Level in 27 Years

Asian stock markets are posting solid gains on Friday with Japan’s NIKKEI 225 leading the way with a move to its highest intraday level in almost 27 years. Earlier in the session, the index jumped as much as 1.7 percent, its highest intraday levels since November 1991, with most sectors trading in positive territory.

The strong performance in the U.S. markets helped underpin the NIKKEI 225 early in the session, but the rally was further boosted by better-than-expected data from Japan. The country’s unemployment rate fell 0.1 percent from the previous month to 2.4 percent. Japan also saw an increase in its month-on-month industrial output in August, while retail sales in August were higher as compared to a year earlier.

U.S. Equity Markets

The major U.S. equity indexes shrugged off early session weakness on Thursday to finish higher for the session. The benchmark index finished higher for the first day in five. The blue chip average posted its first winning session after three consecutive lower closes. And the tech-based index advanced toward a new all-time high.

Most of the gains were fueled by solid gains in Apple which is a component in all three major stock indexes. The communication services company rose 2.1 percent after J.P. Morgan initiated the stock with an overweight rating. The analyst covering the company said he sees strong growth for Apple’s services offerings, noting the company is “transforming from a hardware company to a services company faster than investors had expected.”

In the cash market, the benchmark S&P 500 Index settled at 2914.00, up 8.03 or +0.28%. The blue chip Dow Jones Industrial Average finished at 26439.93, up 54.65 or +0.21% and the tech-driven NASDAQ Composite closed at 8043.78, up 53.41 or +0.67%.

Investors also liked Amazon, which rose 1.9 percent after Stifel hiked its price target on the stock to $2,525, implying a near 30 percent surge from Wednesday’s close. “The company is investing in a number of initiatives, including Prime, AWS, India, logistics, video content and Alexa, which will limit the opportunity for near-term margin expansion,” Stifel said. This is now the most bullish Wall Street forecast on the stock.

U.S. Economic Data

Core Durable Goods Orders came in a 0.1%, lower than the 0.4% forecast. Durable Goods Orders came in 4.5% higher, beating the 1.9% estimate. The previous report was revised higher to -1.2%.

Final GDP was 4.2%, matching the forecast.

The Goods Trade Balance was -75.8 Billion, worse than the -70.6 Billion forecast. Preliminary Wholesale Inventories came in at 0.8%, worse than the forecast 0.3%. The previous month improved to 0.6%.

Pending Home Sales fell 1.8%. Traders were looking for a decline of 0.2%.

Finally, Weekly Unemployment Claims rose to 214K, slightly above the 208K forecast.