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Dow gains for the eleventh straight trading day ahead of Fed decision, major earnings

Wall Street

Wall Street kicked off the week on a front foot as the bull run continued ahead of the critical Fed’s rate decision and a slew of major tech earnings, including Meta, Microsoft, and Alphabet. Dow rose for the eleventh straight trading day, the longest winning streak in six years, led by financial and energy stocks, while big tech stocks were mixed as investors continued rebalancing their positions. However, a jump in oil and grain prices may complicate the inflation outlook and central banks’ policy path. Notably, the US bond yields climbed, pushing up the US dollar, which pressured gold prices.

On the economic front, the US flash PMI shows that manufacturing activities contracted for the last 8 out of 9 months. And the services sector expanded the least in the last five months. The data indicate a potential slowdown in economic growth in the second quarter ahead of the GDP release.

In Asia, most regional stock markets finished lower on Monday, but futures jumped on the news that the Chinese government pledged more stimulus measures to support the property sector. The ASX 200 futures were up 0.57%, the Hang Seng Index futures rose 2.74%, and Nikkei 225 futures advanced 0.40%.

Price movers:

  • 9 out of 11 sectors finished higher in the S&P 500, with Energy and Financial stocks leading gains, up 1.66% and 1.01%, respectively. Healthcare and Utilities are the only two sectors that ended in the red, down 0.23% and 0.28% respectively.
  • Elon Musk rebranded Twitter Logo to “X.” The action may aim to develop the social platform into an all-in-one app, akin to the Chinese WeChat, that can provide services, including purchasing goods and services.  
  • Apple opens Vision Pro developer kit applications to selected developers. Some developers can use the new hardware to build their apps, but it will remain Apple’s property and require a return until the headset is officially launched in 2024.
  • The US dollar index rose for the fourth consecutive session to above 101 amid climbing US bond yields. The comeback in the USD may suggest that the Fed could hold rates higher for longer even though it ends a hiking cycle.
  • WTI futures jumped to a three-monthhigh as supply concerns overrode recession fears after the Secretary General of the International Energy Forum (IEF) warned of ramp-up demands from China and India in the second half of the year. Oil prices may head off $85 per barrel from a technical perspective.

ASX and NZX announcements/news:

  • No Major announcements.

Today’s agenda:

  • US CB Consumer Confidence

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