Wall Street ended the day mixed, with the Nasdaq 100 and S&P 500 finishing higher, while the Dow Jones was down. The Nasdaq has finished higher for the last four straight weeks amid a tech-led rally, with investors' funds piled into cash-healthy big tech giants for safety following the US banking drama early in March.
At the same time, the industrial and consumer stock-heavily weighted index, the Dow, has fallen for two days in a row as economic concerns pressed on those growth-sensitive sectors. Though there is little chance of a US debt default, investors are still cautiously watching the negotiation progress, with President Biden and house speaker Kevin McCarthy meeting at 5.30pm (ET).
Notably, US bond yields climbed for seven straight trading days, while the US dollar index held above 103 at a one-month high, as markets expect the Fed to keep the interest rate at a high level for longer, despite a likely rate hike pause in June. This sent gold lower, retreating from a double-top pattern after hitting an all-time high in early May, while crude prices stabilised without clear clues of near-term directions.
Asian markets are set to open higher, with ASX 200 futures up 0.1%, Hang Seng Index futures up 0.31%, and the Nikkei 225 rising 0.52%.
Six out of 11 sectors in the S&P 500 finished higher, with communication services leading gains, up 1.17%. The consumer sectors, including consumer staples and consumer discretionary, lagged broad markets, down 1.47% and 0.37%, respectively.
Zoom shares rose 1.7% in after-hours trading amid a beat on earnings expectations. The video communication company reported earnings per share at US$1.16 versus an expected US$0.99 on revenue of US$1.11 billion, higher than the estimated US$1.08 billion. The company raised its “outlook for the fiscal year 2024 while continuing to invest in innovations such as AI".
Meta Platforms’ shares rose 1%, despite a record fine of 1.2 billion euros (US $1.3 billion) by European privacy regulators over the transfer of EU users’ data to the US. The privacy concern of US social media has been long an issue between Meta and European lawmakers since 2020. Meta said it would appeal the decision and the fine.
JPMorgan shares slipped 0.8% after the bank upgraded its outlook on interest rate income following First Republic Bank’s takeover at the Investor Day. However, the bank provided a weak trading and investment banking forecast amid deteriorated economic outlooks.
The US dollar continued to strengthen against the Japanese Yen and the Chinese Yuan amid a divergence monetary policy stance between the US and major Asian economies.
Gold’s retreat may continue due to a firmed USD and bond yields. It may also be a technical correction as double-top pattern surfaces, with potential near-term at about US$1,900 per ounce.
By contrast, WTI futures seemed to continue the rebounding trend from a technical perspective as a possible double-bottom reversing pattern may send it to above US$80 per barrel again.
ASX and NZX announcements
Turners Automotive Group (NZX: TRA) reported record earnings for FY23 ended on 31 March. Revenue was at NZ$389.6 million, up 13% from a year ago and profit rose 9% to NZ$52.2 million. The FY23 dividend was declared at 7 NZ cents, bringing the full-year payout to 23 NZ cents, or a gross yield of 8.5% per annum.
Australian Flash Manufacturing PMI
Bank of Japan Core CPI for April y/y