Aussie stocks are poised to bounce into the green on the first trading day of the new year — flying in the face of a dismal final session on Wall Street.
ASX 200 futures forecast a 32-point jump by the morning bell, bringing the benchmark index up 0.45%.
What’s new on Wall Street?
New York markets farewelled 2022 in the red, with the S&P 500 booking its worst trading year on record since 2008.
In fact, all four major indices failed to rise above the rort, each closing just under 0.3% down before ringing in the new year.
OANDA senior market analyst Craig Erlam said stock markets limped into 2023, with investors seemingly making the most of the festive break to refuel for another wild year.
“Equities are a little lower on the final trading day of the year but broadly speaking, over the last week there has been no development, just choppy trading with no conviction or direction,” he explained.
“It would appear investors are positioned for an opening quarter of significant uncertainty, which is about right.”
On the sector front, only energy stocks were able to clinch a green finish after oil broke free of a post-Christmas, pre-new year rort.
It was also a mixed bag among the large caps — Tesla (NASDAQ:TSLA) rose 1.1% despite missing analysts’ sales expectations in the December quarter.
Meanwhile, Southwest Airlines (NYSE:NYSE:LUV) posted a 0.9% recovery — a flight cancellation furore over the holiday season took its share price down more than 12%.
Southwest blamed a winter storm for the disruptions and CEO Bob Jordan said the airline would move forward with the lessons it had learned as flight schedules resumed.
“We have plans to invest in tools and technology and processes but there will be immediate work to understand what happened,” he told the press on New Year’s Eve.
Commodities and currency
Oil markets rose above recent volatility in the last trading week of the year, leaving investors optimistic about further upside in 2023.
West Texas Intermediate closed out the year up 2.69%, fetching just more than US$80 a barrel.
Things are also looking up on the gold front — the precious metal entered 2023 up 0.22% to change hands at US$1,830 an ounce.
However, in a note on the outlook, OANDA’s Craig Erlam said gold lacked the momentum to build on recent gains in any considerable way.
“The outlook may still look very positive for the yellow metal, with central banks surely nearing peak interest rates and the economic outlook rather bleak but in the near term, he stated.
“A correction may be on the cards in the absence of another bullish catalyst.”
Meanwhile, iron ore entered the new year on a tear thanks to a 5% jump in futures in the last week of 2022.
The steelmaking commodity rose to fetch US$116.20 a tonne but analysts are expecting a crunch in the first quarter as China eases COVID restrictions and output softens.
Closer to home, the Aussie dollar finished strong. Our local currency rounded out the year buying 68 US cents and 56 British pence.
On the ASX
It looks like the market is still digesting its Christmas lunch as investors settle in for a slow news week.
There’s not much out from the large caps just yet, save for Perpetual confirming a special 35-cent-per-share dividend.
However, Core Lithium has kicked off the new year with a new milestone: its maiden lithium ore shipment from the Northern Territory.
Looking ahead, there could be good news from the Reserve Bank sooner than you think.
Analysts are forecasting two more rounds of interest rate hikes before the firm hits the pause button in the second half of 2023.
Still, there’s a way to go before a rate cut with pundits tipping March 2024 as the earliest easing date.
More news to come from the monetary policy camp in February, so watch this space.