Wall Street bounced off session lows but finished lower after Fed Governor Lael Brainard said to stay the course in rate hikes. The US bond yields climbed higher on the comments but are still at a multi-month low level, sending the US dollar lower, while commodity prices rose further on supply concerns as China reopens. Risk aversion sentiment has also pushed gold to a fresh 7-month high.
In Asia, the ASX 200 rallied to the highest since April 2022 as miner stocks rose on strong production numbers and positive guidance. Its stock markets have also been buoyed by a sharp decline in Australian bond yields due to an unexpected jump in the unemployment rate which sent the Australian dollar down. The New Zealand dollar slid against most major currencies due to the Prime Minister’s resignation.
Futures point to a mixed open in most Asian equity markets. ASX futures slipped 0.01%, Nikkei 225 futures were down 0.08% and Hang Seng Index futures rose 0.80%.Click to enlarge the table
- Dow fell for the straight trading day, dragged by bank stocks, erasing most of the gains in January. Only 3 out of the 11 sectors in the S&P 500 finished higher, with Energy up 1.11%, Communication Services up 0.9%, and Healthcare up 0.23%.
- Netflix’s shares jump 5% in after-hours trading as the company beat market expectation for the net paid subscribers in the fourth quarter, despite a miss on earnings. The live streamer added 7.6 million users well above an estimated 4.57 million. It reported $0.12 in earnings per share (vs. $0.45 expected) on a $7.85 billion in revenue. The founder Reed Hastings steps down from the CEO role.
- Chinese markets rallied one day ahead of the Luna New Year, with Shanghai Index up 0.49%, and CSI 300 Index up 0.62%. The Chinese property stocks all rose amid the ongoing stimulus measures taken by Beijing at the back of a U-turn in the country’s Covid-Zero policy.
- Gold futures spiked to the highest level seen in April 2022 due to a softened US dollar and risk-off trades. Gold price surged nearly 20% from the November low as the US bond yields fell sharply, pushing metal prices to rebound after a year-long decline.
- Crude oil futures resumed gains on demand optimism as the positive outlook for China’s economic recovery continued to lift growth-sensitive commodity prices.