BANGKOK– Asian shares were mixed on Monday after Wall Street ended its eighth straight winning week with a quiet close following reports that inflation was falling and the economy may be on the rise.
Tokyo's Nikkei 225 rose 0.2% to 33,225.45 and Taiwan's Taiex gained 0.1%. Bangkok's SET rose 0.2%. The Shanghai Composite index lost 0.3% to 2,905.79.
Most markets in the region and beyond were closed for the Christmas holidays.
On Friday the S&The P 500 rose 0.2% and is less than 1% below the record of almost two years ago, at 4,754.63. The Dow Jones fell less than 0.1% to 37,385.97, and the Nasdaq gained 0.2% to 14,992.97.
With its eight consecutive weekly gains, the S&The P500 is in the midst of its longest winning streak since 2017.
Wall Street's focus was squarely on a series of economic reports released Friday that led to some swings in Treasury yields.
The Federal Reserve's preferred measure of inflation slowed more than economists expected, to 2.6% in November from 2.9% a month earlier. It mirrored other November inflation reports published earlier this month.
US consumer spending unexpectedly rose during the month. While that is a good sign for growth in an economy driven primarily by consumer spending, it could also indicate that underlying pressures on inflation remain.
Other reports Friday showed orders for durable manufacturing goods rose more than expected in November, new home sales unexpectedly weakened and sentiment for U.S. consumers improved.
The Federal Reserve is walking a tightrope, trying to slow the economy enough through high interest rates to cool inflation, but not so much that it goes into recession. A stronger-than-expected economy could complicate the balancing act.
The yield on 10-year government bonds was 3.90% at the beginning of Monday, approximately the same level as at the end of Friday. The stock is still down comfortably from October, when it was above 5% and putting painful downward pressure on the stock market.
Falling returns have been one of the main reasons the stock market is up about 15% since late October. Not only do they stimulate the economy by encouraging borrowing, they also relieve pressure on the financial system and raise prices for investments. They have eased hopes that inflation has cooled enough for the Federal Reserve to cut rates through 2024.
Traders are largely betting that the Federal Reserve will cut its key interest rate by at least 1.50 percentage points by the end of next year, according to data from CME Group. The federal funds rate is currently in a range of 5.25% to 5.50%, at its highest level in more than two decades.
In currency transactions, the US dollar fell from 142.49 yen to 142.18 Japanese yen. The euro fell from $1.1019 to $1.1007.
