The S&P500 rose to a new all-time high overnight, hitting 4,995 points. Normally, that would set the scene for a similar rally on the ASX but earnings season is likely to complicate the market’s trajectory based on some big cap performances.
ASX200 futures point to a small 0.04% or 3-point lift in early trading.
US and European share markets
All three major US share markets rose overnight, according to Commsec’s daily report, as the Fed’s recent comments on rate cuts and a raft of corporate earnings reports made their mark.
Earnings report movements overnight included:
- Ford, up 6.1% on an increased third-quarter dividend and scaled-back EV investments.
- Enphase Energy surged 16.9% on expectations its solar inverter product will draw increasing demand amidst stabilising inventories.
- American fast food restaurant Chipotle Mexican Grill (NYSE:CMG) gained 7.2% on stronger-than-expected earnings and revenue.
- Pop shoemaker VF Corp (NYSE:VFC) went the other way, slipping 9.7% after missing market expectations.
- Snap, the owner of snapchat, faired even worse with a massive 34.6% tumble on disappointing fourth-quarter results.
The Dow gained 0.4% or 156 points, the S&P 500 0.8% – both new record highs, while the Nasdaq added a full 1% or 148 points.
European stock markets fell overnight on weakness in energy and telecoms, with the sectors shedding 1.1% and 1.2%, respectively.
Telecom giant Vodaphone shed 4%, and Norwegian oil and gas producer Equinor lost 7.8% after cutting overall cash returns to investors by US$3 billion.
The FTSE300 fell 0.3% and the FTSE100 0.7%.
Bonds and Fed comments
The US Fed’s comments on a cautious approach to rate cuts drove bonds higher overnight as the Governor indicated inflation is moving in the right direction without committing to reduce borrowing costs.
The treasury sold a record US$42 billion in 10-year notes at a yield of 4.093%. 10-year yields rose 3 points to 4.12% and 2-year yields lifted 2 points to 4.53%.
Currencies and commodities
It was a mixed trading session for the US dollar.
The Euro slipped slightly from US$1.0783 to US$1.0754 and closed near US$1.0770.
The Aussie also dipped, dropping from US65.36 cents to US65.14 cents, with a closing value near US65.20.
The Japanese yen strengthened, moving from 148.24 yen per US dollar to 147.65 yen, and closed near 148.15 yen in the US.
Oil prices gained for a third consecutive day, regaining recent momentum after a momentary dip and buoyed by an anticipated decrease in US inventories.
Stocks fell by 3.15 million barrels last week, a complete upset considering analysts predicted a 140,000-barrel increase.
Distillate stocks decreased by 3.2 million barrels, against expectations of a 1-million-barrel reduction.
Brent crude prices rose by US62 cents or 0.8% to US$79.21 a barrel, while US Nymex crude prices rose by US55 cents or 0.8% to US$73.86 a barrel.
Base metals fell. Copper slid 1.2% to a three-week low as Chinese New Year dampened already sluggish demand from China, while aluminium fell by 0.5%.
Iron ore also fell by US36 cents or 0.3% to US$127.03 a tonne on Wednesday, as the market assessed the impact of increased stimulus measures by Chinese authorities.
Gold marginally increased by US30 cents or less than 0.1% to US$2,051.70 an ounce, with spot gold trading close to US$2,034 an ounce at the US close.
On the small cap front
The small ordinaries gained 28.4 points or 0.97% yesterday, outpacing the ASX200’s 0.47% gain.
You can read about the following and more on our website throughout the day.