The ASX looks set to open strongly this morning with the ASX SPI futures up 0.73% at 9:00 am AEDT.
This follows the RBA’s decision to keep rates on hold with the warning that rate cuts this year are not a sure thing as “the job is not done” in regard to countering inflation.
In the US, Federal Reserve official Loretta Mester also talked down the possibility of lower rates in the near term, saying she was in no rush to begin rate cuts, further dampening market expectations for a March interest rate cut by the US central bank.
On Wall Street, stocks trimmed early losses to close in the green — the S&P 500 was 0.2% higher, the tech-focused Nasdaq index gained 0.1%, while the Dow Jones index lifted 0.4%.
What happened overnight?
Here’s what we saw (source CommSec):
US markets
US sharemarkets rose in choppy trading on Tuesday as investors scrutinised big-ticket earnings and awaited commentary from policymakers for clues on the timing of the US Federal Reserve's first interest rate cut.
- GE HealthCare (NASDAQ:GEHC) Technologies gained 11.7% after the medtech firm posted better-than-expected fourth-quarter earnings, driving the S&P 500 healthcare sector up by 1.1%, to an all-time high.
- Chemicals firm DuPont (NYSE:DD) de Nemours jumped 7.4% after beating fourth-quarter profit estimates, announcing a new US$1 billion share repurchase program and hiking its dividend.
- Palantir Technologies (NYSE:PLTR) soared 30.8% after forecasting upbeat annual profit.
- Weighing on the tech-heavy Nasdaq, chip stocks Nvidia and Broadcom (NASDAQ:AVGO) both fell 1.6%.
- New York Community Bancorp slid 22.2%, stretching a sell-off since the lender reported a surprise quarterly loss last week.
- FMC dropped 11.5% after the chemical manufacturing company posted weaker-than-expected quarterly results.
The Dow Jones index rose by 141 points or 0.4%, the S&P 500 index gained 0.2% and the Nasdaq index added 11 points or 0.1%.
US government bond yields dipped as investors awaited fresh signals on when the US Federal Reserve is likely to begin cutting interest rates.
Cleveland Fed president Loretta Mester said that if the US economy performed as she expected, this could open the door to rate cuts. But Minneapolis Fed president Neel Kashkari said the US central bank was "not done yet" with inflation.
European markets
European sharemarkets advanced on Tuesday, with the energy index leading the charge, up 2%, tracking an advance in crude oil prices.
Oil giant BP (LON:BP) climbed 5.5% after reporting better-than-expected fourth-quarter earnings and accelerating the pace of its share repurchases.
- The continent-wide FTSEurofirst 300 index rose by 0.6%.
- In London, the UK FTSE 100 index gained 0.9%.
Commodities
Global oil prices climbed on Tuesday in anticipation of tighter supply later in February, while markets watched US diplomatic efforts to end the Gaza War and quell tensions in a major crude-producing region.
- The Brent crude price rose by US60 cents or 0.8% to US$78.59 a barrel.
- The US Nymex crude price gained US53 cents or 0.7% to US$73.31 a barrel.
Base metal prices rose for the first time in five sessions on Tuesday, buoyed by the efforts of China to stabilise its markets as well as a weaker US dollar and a drop in London Metal Exchange (LME) inventories.
- Copper futures rose by 0.3%.
- Aluminium futures gained 1%.
The gold price rose on Tuesday after a pullback in the US dollar and US Treasury yields.
- Gold futures rose by US$8.50 or 0.4% to U$2,051.40 an ounce
- Spot gold was trading near US$2,035 an ounce at the US close.
On Tuesday, iron ore futures slipped US$1.55 or 1.2% to a near three-month low of US$127.39 a tonne as the upcoming Lunar New Year and ongoing property market crisis cast a shadow over Chinese demand.
Currencies
Currencies were mixed against the US dollar in European and US trade.
- The Euro fell from US$1.0762 to US$1.0723 and was near US$1.0755 at the US close.
- The Aussie dollar rose from US64.86 cents to US65.23 cents and was near US65.20 cents at the US close.
- The Japanese yen firmed from 148.79 yen per US dollar to JPY147.82 and was near JPY147.90 at the US close.
What’s on today?
In Australia, selected living cost indexes are issued. Amcor, BWP Trust, Centuria Industrial REIT and Cettire all release earnings results. ResMed trades ex-dividend.
On the small cap front
The S&P ASX Small Ordinaries lost 0.10% yesterday, while the ASX 200 ended 0.58% lower.
You can read more about the following throughout the day:
- Aruma Resources Ltd (ASX:AAJ) has completed an aircore drilling program at the Salmon Gums Project in the Eastern Goldfields region of Western Australia including the first-pass test for rare earth element potential.
- Piedmont Lithium (ASX:NASDAQ:PLL, OTC:PLLTL) Ltd provided a corporate update, reporting its North American lithium production ramp-up continues with record Q4 2023 production, while Ewoyaa in Ghana is advancing through the approvals process.
- American Rare Earths Ltd (ASX:ARR, OTCQB:ARRNF) has completed a detailed 'Technical Report of Exploration and Updated Resource Estimates of the Halleck Creek Rare Earths Project', which includes updated JORC resource estimates.