Market Updates

Markets continue to gain as investors hope for a downshift in Fed interest rate rises, After suffering for the past year on interest rate rises Tech lead gains overnight on hopes of a dovish Fed. The Dow Jones was up 269 points (0.8%). At best it was up 271 points, and at worst it was up 7 points. The NASDAQ rose 1.76%, and the S&P 500 finished up 1.28%. In Europe, Stoxx 50 +1.04%, UK FTSE +0.4%, France's CAC +0.8%, German DAX +1.17%. SPI Futures are up 57 points (+0.80%) this morning as the US optimism spills over.

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ASX 200 rose 64 points to 7195 (0.9%) in a good bounce led by resources. Even a better CPI number couldn’t hold the Mustangs down. Gold miners bounced back after falls yesterday, iron ore miners BHP, FMG and RIO all better by close to 2% and even lithium stocks had a day in the sun. PLS up 2.8% and AKE with a broker upgrade up 5.1%. Base metal stocks in demand. S32 up 1.1% and IGO up 5.2%. Energy stocks better too, WDS up 1.5% and BPT doing OK. REITs did well despite no move on the yields, GPT up 1.2% and GMG up 2.9%. E-commerce is the place to be apparently. Industrials were firm but unexciting. Tech better with WTC up 1.2% but XRO falling 3.3% on UK tax changes. ‘Old skool’ platforms were up, REA up 2.4% and CAR up 2.9%. Banks were becalmed with the Big Bank Basket at $180.90(0.3%). Insurers improved, and Fund managers also doing better, GQG up 2.0%. In corporate news, SQM is moving in the WA lithium race with a possible 20% stake in AZS. On the economic front, busy day, retails sales boosted by Black Friday, CPI above expectations, there goes the pause and job vacancies down a little but still pretty robust. Asian market better, and 10-year yields around 3.71%. Dow futures up 28 points.
 
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The Dow Jones Industrial Average gained 186.45 points, or 0.56%, to end at 33,704.10. The S&P 500 traded up 0.70%, to close at 3,919.25 points.

The Nasdaq Composite led the major indexes for another day, adding 1.01% to end the session at 10,742.63. The average has rallied for the past three sessions as optimism over cooling inflation pushed investors to beaten-up technology stocks. It was the index’s first three-day win streak since November.

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ASX 200 closes down 20 points to 7131 (0.3%), its first loss in four trading sessions. Resources slid lower as Chinese authorities look to have been spooked by the big iron ore rise recently and looking to talk prices down. BHP fell 0.4%, FMG up 0.7% after a loss yesterday, lithium stocks on the nose, PLS dropped 1.5%, IGO off 1.8% and MIN down 1.3%. Rare earths also in the doghouse with ARU down 9.1% and LYC off 3.8%. Second-line lithium stocks whacked, CXO down 5.0% and LTR down 1.4%. Gold stocks fell despite a bullion rise, NCM down 2.3%, NST down 1.9% and DEG off 7.9%. Energy stocks eased as oil came off a little. Coal stocks lower too. The banks held firm but no great moves, the Big Bank Basket was mostly unchanged at $180.38. MQG down 0.3% on some EU FX issues with a $71m problem. Insurers down, QBE down 2.7% and MFG falling 1.1%. Industrials drifted lower, REITs mixed, tech dull and unexciting. CPU steadied down 0.2%. In corporate news, LKE updated the market on its Kachi project, up 1.2%, RCE jumped 4.6% after being granted an intent offer from the patent office. In economic news, Xmas consumer confidence cheer came with a 4.9-point rise last week. In Asian markets, Japan rose 0.8%, China unchanged and HK down 0.3%. 10-year yields steady at 3.72%. Dow futures down 70 points.

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US stocks failed to hold onto the morning rally with the Dow falling in the afternoon after two Fed officials signalled that interest rates could top 5%. The Dow Jones closed down 113 points (-0.34%). At best it was up 305 points, at worst it was down 143 points. The NASDAQ rose 0.63%, supported by gains in Tesla up 5.93% Amazon up 1.49%, and Microsoft up 0.97%. The S&P 500 fell 0.08%. In Europe, STOXX 50 +1.5%, FTSE +0.3%, CAC +0.9%, and DAX +1.4%. SPI Futures are down 10 points.

Copper prices have hit a 6-month high, up 3.1% as hopes for increased demand from the reopening of China. The weakening of the US dollar continues to push the price of commodities up with Zinc up 5% and Aluminium up 5.8%. Nickel fell 2.2%. Gold continuing its rally, up 0.3%. Iron ore also continuing skyward on China demand, up 0.7%. Brent Crude up 1.5% and WTI up 1.25%. Bitcoin had modest gains overnight, up 3.4% after 6 days of gains.

Later in the week, investors will watch for December’s consumer price index report coming Thursday and big bank earnings scheduled for Friday. 

• S&P 500, Nasdaq rise as investors bet on less aggressive rate hikes.
• Global stocks rally to near 4-week highs, oil rises on hopes of 'soft landing'.
• Dollar at 7-month low vs euro on slower Fed rate hike expectations.
• U.S. Treasuries rally as market anticipates Fed pivot.
• European shares rise on China reopening optimism, tech stocks lead gains.
• Oil rises over 1% on demand optimism as China reopens borders.
• US coal prices plunge amid warm winter weather.
• Goldman Sachs readies biggest layoffs since the financial crisis.
• Credit Suisse nears deal to buy Michael Klein's advisory firm .
• Bed, Bath & Beyond rebounds in meme-stock rally.
• Tesla delivery time is longer on some China models after discounts.
• Russia intensifies assaults on Ukrainian salt mining town and eastern front.
• Chinese rush to renew passports as COVID border curbs lifted.
• UK strikes to continue after govt's talks with unions fail.

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ASX 200 started the week up 42 points to 7154 (0.6%). A solid start but off the intraday highs. Banks somewhat lacklustre with the Big Bank Basket up to $180.41 (0.2). Mixed across the financials, AMP slipped 4.2% on a Collinmate update, GQG rose 5.7% on FUM and insurers slid on IAG update. Industrials firmed with TCL up 1.1%, QAN up 1.9% and REITs better with GMG up 1.4%. Tech a little mixed, CPU sold off hard down 5.5% as brokers turn bearish, WTC up 1.3% and the All-Tech Index slightly higher. In resources, gold miners shone, NCM up 2.8%, NST up 1.7% and EVN pushing another 2.2% ahead. Lithium shares were mildly positive, PLS floundered a little, off 0.8%, CHN rose 1.5% and S32 up 3.8%. Iron ore miners mixed, BHP up 1.0% but FMG down 0.8%. Energy shares better, WDS up 1.2% and STO up 1.3%. Coal stocks mildly positive. In corporate news, FMG CFO resigns, IGO -Tianqi bids for ESS at 50c. IMU up 6.3% on ethics approval for Vaxinia trials. Stellantis has bought into E25 with the stock rallying 14.6%. On the economic front, building approvals fell more than expected. Asian markets slightly higher with Japan closed for a holiday. HK opens its border to China for the first time in three years.

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US stocks triggered a global rally overnight following a crucial US jobs report that showed wage growth slowed in December, fuelling speculation the slowdown will keep the Fed at bay from intensifying its battle with inflation. The Dow Jones closed up 701 points (+2.13%). At best it was up 781 points, and at worst it was up 67 points. The NASDAQ rose 2.56%, and the S&P 500 finished 2.28% lower. In Europe, STOXX 600 +1.16%, FTSE +0.87%, CAC +1.47%, DAX +1.20%.

• 200K non-farm payolls number versus 263,000 in November.
• "Softening trend" taken positively.
• Lower than expected (225K expected).
• Unemployment rate at a new low of 3.5%.
• Average hourly earnings up 4.6% in December down from 4.8% in November.
• The US dollar dropped sharply.
• US bond yields fell.
• The equity markets bounced setting a new hope for a market rally this month based on an inflation peak.

Commodities – Most commodities rallied overnight following the US jobs report. All base metals up with copper and aluminium finishing highest up 2.38% and 2.3%. Copper hits a three-week high due to a weaker dollar recovering some of Thursday’s losses after falling 6.8%. A weaker dollar makes commodities priced in USD cheaper for buyers using other currencies. Iron ore up 1.42% on optimism around China stepping up support for its struggling domestic property sector. Oil prices mixed, brent crude down 0.23% and WTI up 0.22%. Gold rose sharply up 1.78%, seeing a seven-month high as treasury yields fell. Resource stocks BHP and RIO both up 4.28% and 2.95% in ADR terms. Bitcoin steady up 0.23%.

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The Dow Jones Industrial Average fell 348.99 points, or 1.05%, to 33,027.49 — after falling as much as 803.05 points earlier in the session. S&P 500 declined 1.45% to 3,822.39. Meanwhile, the Nasdaq Composite was 2.18% lower at 10,476.12.

This decline follows a 526-point rally in the Dow on Wednesday after better-than-expected earnings from Nike.
So far in December, the Dow is down 4.52%, while the S&P 500 and Nasdaq have tumbled 6.32% and 8.65%, respectively.

In commodities, base metals are mostly down as the US dollar climbed. Zinc, tin, and copper were the biggest losers falling 1.9%, 1.08%, and 0.84%, respectively while lead and aluminium rose 0.1% and 0.59%. Copper prices are down ~15% this year as demand eroded and data suggests interest rates will remain higher for longer applying pressure on growth. Brent crude and WTI are both down 0.95% and 0.69%. BHP and RIO are also both down 2.04% and 0.72%, respectively, in ADR terms. Gold fell 1.1% and bitcoin held steady up 0.08%

HEADLINES

• ASX set to dive 1.5pc, following Wall Street’s plunge.
• Low weekly jobless claims underscore U.S. labor market tightness; Q3 growth revised up.
• Wall Street dives amid Fed rate hike worries, chipmaker woes.
• Short sellers gain nearly $304 bln after tumble in U.S. stocks.
• Tesla shares tank after doubling U.S. discounts on key models.
• Twitter's top global policy official departs as layoffs continue.
• FTX founder Bankman-Fried released on $250 mln bond at U.S. court appearance.
• Oil falls as rate hike fears outweigh tighter U.S. stockpiles.
• Global steel output falls 2.6% yr/yr in November.
• Gold drops over 1% after U.S. data lifts prolonged Fed hike hopes.
• Shanghai hospital warns of 'tragic battle' as COVID spreads.
• Putin says Russia wants end to war in Ukraine.
• U.S. Senate passes $1.66 trillion spending bill, sends to House.
• Fed's balance sheet drawdown could sunset next year.

Catch up on the latest news with Henry Jennings’ Pre-Market Podcast.

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 ASX 200 finished up 37 points to 7153 (0.5%). A thin and directionless day despite the rise. Investors are winding down. Resources mixed after the 29M production issue caused them to fall hard down 22.2% with BHP and OZL announcing the deal is done. Now to regulatory issues and timing. Lithium stocks continue to slip as brokers pile on with downgrades. Oil and gas stocks slightly firmer with WDS up 0.2%. Limited moves elsewhere. Gold miners gave back some gains with NCM off 1.1% and NST down 0.8%. Industrials firmed again with REITS doing well despite yields pushing higher again. GMG up 1.3% and SCG up 1.4%. Tech stocks better as WTC rose 1.5% and XRO up 1.6% with the All Tech Index up 1.8%. Banks slightly better as the Big Bank Basket rose to $183.70 (0.6). MQG rallied 0.5% and Fund Managers were better, MFG up 2.3% and GQG up 2.6%. Healthcare in rude health today, CSL up 1.2% and COH gaining 2.7%. In corporate news, KGN rescued a small furniture player from administration, BHP went official with OZL and 29M tried to sneak through a downgrade. Failed. MPL will return another $207m of the savings from CV19 to customers. Nothing on the economic front. Asian markets slightly higher, HK up 0.5%, China up 0.6% with Japan up 0.5%. 10 -year yields also pushing higher again. 3.78%.

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US tech stocks drove markets up last night off the back of better-than-expected earnings reports and an improvement in consumer confidence. The Dow Jones rose 527 points (+1.6%). At worst it was up 178 points and at best it was up 588 points. The NASDAQ finished the session up 1.54%, the S&P 500 gained 1.49%. In Europe, STOXX 600 was up 1.17%, FTSE +1.7% DAX +1.5% CAC +2.0%. SPI Futures are up 41 points (+0.53%).

Commodities rallied overnight, most base metals continued their rally as the US dollar continued to drop. Nickel and lead flying ahead, up 4.33% and 1.33%, respectively. While aluminium, copper and tin rose 0.63%, 0.23% and 0.65%, respectively. The only base metal to drop overnight was Zinc, falling 2.57%. Oil prices performed well, brent crude up 3.16% and WTI up 2.97%. Coal was unchanged, natural gas up 0.11%, nowhere near enough to claw back yesterday’s losses. Gold was down 0.16%, and bitcoin fell 0.8% overnight.

• Biden and Zelenskiy show solidarity at White House in first wartime visit.
• U.S. consumer confidence rebounds; existing home sales sink.
• Wall Street jumps with help from Nike, FedEx and consumer sentiment.
• Musk to step down as Twitter CEO once he finds 'someone foolish' enough as successor.
• FTX founder Bankman-Fried consents to extradition.
• U.S. slaps sanctions on Iran officials over protest crackdown.
• For Japan's small businesses, central bank move serves up more uncertainty.
• Oil prices rise over $2 on drawdown in U.S. crude stocks.
• World shares advance but face most monthly losses since 2008.
• Recession, rate hikes seen jamming brakes on global 2023 earnings growth.
• European Commission clears Germany's Uniper bailout.
• Core Scientific files for bankruptcy as crypto winter bites.
• U.S. dollar likely has further upside vs yen despite BOJ move.
• Japanese insurers likely to provide tailwind to yen as BOJ shifts.

Tune in to Henry Jennings’ Pre-Market Podcast to get in the know for the day ahead.

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