The ASX rebounded on Friday on the back of surging tech stocks, with the ASX 200 halving the week's losses in one day. The S&P/ASX 200 closed 74.7 points higher, up 1.02%.
The best-performing sectors were IT (2.85%), followed by Consumer Discretionary (1.15%) and Financials (+0.46%). On the flipside, Materials (-3.72%), Real Estate (-2.72%), and Utilities (-2.51%) were the main drags.
The ASX is set to carry Friday’s momentum through the start of this short Australia Day week.
ASX 200 futures are up 26 points to 7,418.00 points.
It was a similar story in the US last week.
“After a choppy opening three weeks of 2024, the S&P500 showed its hand on Friday night, surging above the January 2022 4,818 bull market high," IG Markets analyst Tony Sycamore said.
"Precisely two years in the making, the surge to new highs was supported by Taiwan Semiconductors better than expected earnings report and a broker upgrade for Apple (NASDAQ:AAPL). The Nasdaq finished the week 2.86% higher at 17,314. The S&P500 added 1.17% to 4,839, while the Dow Jones added 272 points (0.72%) to close at 37,864.”
“Turning to the economic data on Friday, the University of Michigan’s consumer sentiment survey soared to 78.8 in January from 69.7 in December, supported by lower inflation and strengthening income expectations.
"The combined rebound in December and January was the largest two-month increase since the recession of 1991 ended. The probability of a March rate cut ended the week at 50/50.”
What happened last week?
Here’s what we saw (source Commsec):
US markets
The benchmark S&P 500 index posted a record high close for the first time in two years on Friday, fuelled by a rally in chipmakers and other heavyweight technology stocks on optimism around artificial intelligence.
Nvidia climbed 4.2% and Advanced Micro Devices (NASDAQ:AMD) rallied 7.1% after server maker Super Micro Computer lifted its second-quarter profit forecast, sending its shares soaring 35.9%. The Philadelphia SE semiconductor index soared 4% to a record high, while the S&P 500 information technology sector index jumped 2.4% to an all-time high.
Microsoft (NASDAQ:MSFT) and Apple, the world's two most valuable companies, both rose more than 1%. Travelers (NYSE:TRV) jumped 6.7% after the insurer's fourth-quarter profit more than doubled.
- The Dow Jones index rose by 395 points or 1.1% to close at a record high.
- The S&P 500 index gained 1.2%, surpassing both the prior record intraday and closing highs from January 2022.
- The Nasdaq index added 255 points or 1.7%.
- For the week, the Dow rose 0.7%, the S&P 500 gained 1.2% and the Nasdaq jumped 2.3%.
European markets
Were mixed on Friday, logging weekly declines, as investors tempered their expectations around major central banks reducing borrowing costs this year. For the day, basic resources led declines, down 1.5%.
On the data front, annual German producer prices fell more than expected in December, decreasing 8.6%, after being down 7.9% in November (survey: -8%). British retail sales slid 3.2% in December (survey: - 0.5%), suffering the biggest drop in almost three years stoking concerns of a recession.
- The continent-wide FTSEurofirst 300 index dipped 0.3%, ending 1.4% lower over the week.
- The UK FTSE 100 index was flat with a weekly loss of 2.1%.
Currencies
Were stronger against the US dollar in European and US trade.
- The Euro rose from US$1.0866 to session highs near US$1.0895 at the US close.
- The Aussie dollar lifted from US65.65 cents to US66.00 cents and was near US65.95 cents at the US close.
- The Japanese yen firmed from 148.77 yen per US dollar to JPY147.84 and was near JPY148.15 at the US close.
Commodities
Global oil prices settled lower on Friday but recorded a weekly gain as Middle East tensions and disruptions to oil output offset concerns about the Chinese and global economies.
- The Brent crude price fell by US54 cents or 0.7% to US$78.56 a barrel.
- The US Nymex crude price lost US67 cents or 0.9% to $73.41 a barrel.
- For the week, Brent gained 0.3% while the US benchmark lifted 1%.
Base metal prices were mixed on Friday.
- Copper futures rose by 1.1% and were up 1.3% over the week.
- Aluminium futures shed 0.4% and dipped 1.8% for the week.
On Friday, the gold futures price rose by US$7.70 or 0.4% to US$2,029.30 an ounce.
- Spot gold was trading near US$2,029 an ounce at the US close.
- Bullion fell 1.1% over the week, the biggest decline in six, on lower expectations of early rate cuts.
- Iron ore futures slipped US20 cents or 0.1% to US$135.88 a tonne on Friday.
- Iron ore fell for a third straight week, down 1%, with investors weighing Beijing's latest pledge to shore up China's faltering economy with further stimulus.
What about small caps?
The S&P/ASX Small Ordinaries gained 0.77% to finish at 2,863.80. Over the five days of trading last week, it was down 0.94%.
It has been a slow start to the week on the news front as we enter the last week of the summer school holidays, but you can read about the following and more throughout the day.