Stock Market Today: Asian stocks are mixed as China announces its 5% economic growth target for 2024

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Stocks were mixed in Asia on Tuesday after China's premier said the country's economic growth target this year was around 5%, in line with expectations.

Hong Kong's benchmark fell while Shanghai rose slightly.

Li Qiang, in his address at the opening session of China's National People's Congress, also said Beijing would issue 1 trillion yuan ($139 billion) in long-term bonds to fill financing gaps, support cash-strapped local governments and both in progressive Technology as well as investing in new technologies in social support and education.

Li also said China will expand government-subsidized housing. It said it was part of a program aimed at reversing a downturn in the property market after a crackdown on excessive borrowing left dozens of developers unable to pay off their debts.

But the government's intention to keep its deficit at 3% of China's GDP disappointed investors hoping for more aggressive measures, Stephen Innes of SPI Asset Management said in a commentary.

“The unchanged 3% target fell short of expectations and signaled a cautious approach to fiscal policy,” he said.

The congress is the biggest political event of the year, although it mainly only endorses the policies of the ruling Communist Party's top leaders.

China's economy grew at an annual rate of 5.2% last year, after growth slowed to 3% in 2022.

Initial reaction to Li's address and the annual budget report, also released Tuesday, appeared muted. Hong Kong's Hang Seng Index fell 2.7% to 16,153.97 and the Shanghai Composite Index rose 0.3% to 3,047.79, barely moving for most of the day.

Japan's Nikkei 225 index closed flat at 40,097.63, just below Monday's record close.

In Seoul, the Kospi fell 0.9% to 2,649.40, while Australia's S&P/ASX 200 fell 0.2% to 7,724.20.

India's Sensex fell 0.3% while Taiwan's Taiex gained 0.4%.

On Monday, the S&P 500 slipped 0.1% to 5,130.95, hitting its latest all-time high and its 16th week of gains in the last 18. The Dow Jones Industrial Average fell 0.2% to 38,989.83 and the Nasdaq Composite lost 0.4% to 16,207.51.

Momentum in U.S. stocks slowed after rising on fears that inflation appears to be cooling, interest rate cuts are imminent and the U.S. economy has so far ignored forecasts of a recession. At the same time, the hype surrounding artificial intelligence technology has catapulted some stocks to stratospheric heights.

Super Micro Computer, which sells server and storage systems for AI and other computers, rose another 18.6% on Monday. It is up almost 1,000% in the last 12 months.

The poster child of the AI ​​mania is Nvidia, whose chips are driving much of the entry into AI. It rose another 3.6% on Monday, taking its year-to-date gain to 72.1% after more than tripling in 2023.

Such increases are reinforced by a rise in profits and expectations of continued tremendous growth, but they raise concerns about a possible bubble.

Several events planned for this week could rattle the market.

On Wednesday, Federal Reserve Chairman Jerome Powell will testify before a House committee on monetary policy. He said the Fed's next step would likely be a rate cut, but also said it needed more evidence that inflation was falling significantly toward its 2 percent target. That was before reports recently showed that inflation was higher than expected at both the consumer and wholesale levels.

A report on Friday will show how the U.S. labor market is performing, with economists predicting a slowdown in January's strong growth.

Several retailers will also release their latest earnings reports this week. These include Costco Wholesale, Gap and Nordstrom.

Another retailer, Macy's, rose 13.5% after two investment firms increased their offer to buy the shares they didn't already own.

On Wall Street, Spirit Airlines lost 10.8%. JetBlue Airways is ending its planned $3.8 billion merger after a court ruling blocked their merger. JetBlue rose 4.3%.

Apple slumped 2.5% after the European Union fined the company nearly $2 billion for unfairly favoring its own music streaming service over Spotify and other rivals.

In other trading early Tuesday, U.S. benchmark crude oil lost 43 cents to $78.31 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell 35 cents to $82.45 a barrel.

The US dollar fell to 150.49 Japanese yen from 150.53 yen. The euro also fell from $1.0856 to $1.0851.