The ASX is expected to finish the week on a high.
ASX 200 futures are trading 66 points higher, up 0.90% as of 8:20 am AEDT, following a positive day on Wall St.
“A robust earnings report from chip maker Taiwan Semiconductor Manufacturing (+9.79%), who projected 2024 revenue growth of more than 20% and a broker upgrade for Apple (NASDAQ:AAPL) (+3.26%), helped US equities shrug off another session of hotter economic data and more cautious Fed Speak,” IG markets analyst Tony Sycamore wrote.
“US Jobless claims fell by 16,000 last week to 187,000, well below expectations of 207,000 and the four-week average of 204,000. Building permits rose by 1.9% MoM in December, beating expectations for a rise of 0.9%. Fed Reserve Bank of Atlanta President, a voter this year, said he expects the first Fed rate rise ‘to be sometime in the third quarter of this year’. There are 140 bp of rate cuts priced for 2024 after blowing out to about 170bps at the end of last week.
It has generally been a tough week for all markets.
Yesterday, Australian stocks felt the brunt of softer overseas markets, with China having a large impact.
Lower commodities prices including iron ore, copper and nickel had a major impact on resource stocks, and higher market interest rates also weighed.
The benchmark S&P/ASX 200 index fell 0.6%, or 46.6 points to 7346.5 at the closing bell led by sharp losses in materials, energy and real estate stocks.
Nine out of the 11 sectors were in the red.
What happened in the markets
Here’s what we saw (source Commsec)
North America
US share markets witnessed an upswing on Thursday, predominantly led by a rally in technology stocks. This movement came as investors assessed recent economic indicators and comments from Federal Reserve officials. Raphael Bostic, President of the Federal Reserve Bank of Atlanta, advocated for a cautious approach towards interest rate reductions. Concurrently, Patrick Harker, President of the Federal Reserve Bank of Philadelphia, expressed his expectation of inflation gradually declining to the 2% goal.
Large-cap technology stocks showed notable performance, with Apple registering a 3.3% increase following an analyst's upgrade. The semiconductor sector experienced a surge, propelled by optimistic projections from Taiwan Semiconductor Manufacturing Company (TSMC) for a tech rebound in 2024. TSMC's US-listed shares soared 9.8%, while Advanced Micro Devices (NASDAQ:AMD) climbed 1.6%, reaching a new peak. Other chipmakers, including Nvidia, Qualcomm (NASDAQ:QCOM), and Marvell Technology, also witnessed gains, ranging from 1.9% to 4.4%.
Boeing (NYSE:BA), the aerospace manufacturer, saw its shares rise by 4.2% after securing an order for 150 Max jets from a new Indian airline. In contrast, the healthcare sector faced some downturns. Humana (NYSE:NYSE:HUM), a health insurance provider, experienced an 8% decline in its shares following a less-than-expected forecast, impacting its peer UnitedHealth (NYSE:UNH), which saw a 1.6% drop in share value.
- The Dow Jones index rose by 202 points or 0.5%.
- The S&P 500 index gained 0.9%.
- The Nasdaq index added 200 points or 1.4%.
Europe
European stock markets experienced a robust recovery on Thursday, with significant gains in the travel and leisure sector, which rose by 5.2%. This surge was led by Flutter Entertainment, which saw its shares jump by an impressive 15.3%. Analysts attribute this uptick to the company's market share expansion and higher-than-anticipated win margins in the rapidly expanding United States market, signalling a promising outlook for 2024.
Meanwhile, minutes from the European Central Bank (ECB) meeting held last month revealed a consensus among policymakers that inflation is on track to return to the target. However, they also acknowledged the presence of risks that necessitate maintaining a steady monetary policy and elevated borrowing costs.
- The continent-wide FTSEurofirst 300 index saw a modest increase of 0.5%.
- The FTSE 100 index, based in London, also recorded a gain, albeit a smaller one, of 0.2%.
Currencies
Were weaker against the US dollar in European and US trade.
- The Euro fell from US$1.0906 to US$1.0846 and was near US$1.0865 at the US close.
- The Aussie dollar eased from US65.74 cents to US65.43 cents and was near US65.65 cents at the US close.
- The Japanese yen dipped from 147.66 yen per US dollar to JPY148.29 and was near JPY148.20 at the US close.
Commodities
Global oil prices rose on Thursday after the International Energy Agency (IEA) monthly report said it expects oil demand to grow by 1.24 million barrels per day (bpd) in 2024, up 180,000 bpd from its previous projection.
US crude stockpiles dropped 2.49 million barrels last week, according to the US Energy Information Administration.
- The Brent crude price rose by US$1.22 or 1.6% to US$79.10 a barrel.
- The US Nymex crude price gained US$1.52 or 2.1% to $74.08 a barrel.
Base metal prices were mixed on Thursday.
- Copper futures lifted 0.3%.
- Aluminium futures shed 0.6%.
- Gold futures price rose by US$15.10 or 0.8% to US$2,021.60 an ounce.
- Spot gold was trading near US$2,022 an ounce at the US close.
- Iron ore futures gained US29 cents or 0.2% to US$136.08 a tonne, aided by renewed hope of further stimulus from top consumer China.