The ASX is set to rise this morning. ASX 200 futures are up 0.3% to 7680 after the US trading session ended.
Yesterday, the ASX200 finished 0.50% yesterday at 7698 led by Real Estate (+1.67%), Consumer Discretionary (+1.29%), and IT (+0.86%). On the downside we saw Utilities (-0.33%), Financials (+0.19%), and Energy (+0.26%) as the main drags.
“Yesterday's session appeared set to repeat Tuesday's price action, where buyers stepped in to take advantage of early weakness before a modestly higher close.
"However, that dynamic changed when a buy program which had a distinctly month-end rebalancing feel hit the market after lunch, locking in a new record high of 7703.8 and a fourth month of gains for the ASX200,” IG Markets analyst Tony Sycamore said.
“Yesterday's key local economic event saw retail sales for January increase by a less-than-expected 1.1%, following a revised 2.1% fall in December.
"The view remains that softer inflation, cooling labour markets, slower growth and household spending will see the RBA remove its tightening bias in June before cutting rates by 25 basis points in August and again in November 2024. A prospect that will continue to support the interest rate sensitive ASX200.”
NASDAQ record
A rise for the local market this morning, would follow gains for US equity markets.
The tech-heavy Nasdaq led the way as core PCE inflation came in as expected (0.4% MoM and 2.8% annually), albeit at the highest pace in 12 months.
The NASDAQ closing at a new record high for the first time since 2021, signalled a strong start to 2024 for stocks. The technology-centric index reached a new peak, closing at 16,091.92 points, surpassing its previous record close of 16,057.44 points on November 19, 2021.
Although its all-time intraday high of 16,212.23 points, set a few days later, remains unbroken, the surge in interest around AI technologies has been a key factor driving share prices higher.
Meanwhile, both the Dow and the S&P 500 indices have also been on a remarkable run, each logging 14 record highs in 2024, with the Dow reaching its latest peak on February 23.
This period marks the Nasdaq's first record close in 569 trading sessions, highlighting a significant turnaround in market dynamics, according to Dow Jones Market Data.
Despite these broader market gains, not all major tech companies have shared in the rally. Notably, three out of the so-called "Magnificent Seven" tech giants have seen their performance wane this year. Tesla (NASDAQ:TSLA) Ltd has seen a 19% decrease, Apple Inc (NASDAQ:AAPL, ETR:APC)'s shares have dropped by 3%, and Alphabet (NASDAQ:GOOGL) Group Ltd has remained stagnant.
Bahnsen Group chief investment officer David Bahnsen observed: “The Magnificent Seven is not quite the monolith that it was in 2023,” indicating a shift in the performance dynamics of these leading tech companies.
“Attention now turns to tonight's ISM manufacturing data and Fed speakers before next week’s labour market updates, including the ADP (NASDAQ:ADP) employment report, JOLTS Job Openings and non-farm payrolls. The rates market is pricing in a first full Fed rate cut in July and has 81bp of rate cuts priced for 2024, in line with the Fed projections of three rate cuts.” Sycamore said.
What happened in other markets (source Commsec)?
European sharemarkets were flat on Thursday, with construction stocks up 1.2%, while health care and food and beverage shares fell 0.7%. Cheaper energy prices pushed annual German inflation down to 2.7% in February from 3.1% in January (survey: 2.7%).
- The continent-wide FTSEurofirst 300 index fell by 0.1% but was up 2% in February.
- In London, the UK FTSE 100 index rose by 0.1%, ending flat in February.
Currencies
Were mixed against the US dollar in European and US trade.
- The Euro fell from US$1.0854 to US$1.0794 and was near US$1.0805 at the US close. The Aussie dollar rose from US64.85 cents to US65.29 cents and was near US64.95 cents at the US close.
- The Japanese yen firmed from 150.13 yen per US dollar to JPY149.20 and was near JPY149.95 at the US close.
Commodities
Global oil prices edged lower on Thursday as US inflation data implied a softening of the world's biggest economy that could weaken crude demand, with rising OPEC production also weighing on prices.
- The Brent crude price fell by US6 cents or 0.1% to US$83.62 a barrel.
- The US Nymex crude price shed US28 cents or 0.4% to US$78.26 a barrel.
Base metal prices rose on Thursday as the US dollar eased, cheapening commodities for buyers using other currencies.
- Copper futures gained 0.2% and aluminium futures rose 1.7%
- On Thursday, the gold futures price rose by US$12 or 0.6% to U$2,054.70 an ounce.
- Spot gold was trading near US$2,043 an ounce at the US close.
- Iron ore futures shed US50 cents or 0.4% to US$124.86 a tonne amid expectations of steel mills ramping up production despite lingering concerns about the Chinese property sector.
On the small cap front
The S&P/ASX Small Ordinaries (XSO) was 1.02% higher yesterday to 2,998.70. It has been a quiet morning on the newsfront ahead of a public holiday in Perth on Monday.