Asia markets are expected to open higher following a three-session rally in the US markets. A slew of strong US company earnings reports pumped a rebound after January saw the worst monthly performance since March 2020. The ASX was up 0.5% on Tuesday and SPI futures are indicating a 0.8% gain today at the open. NZX 50 is up 1.2% in the first trading hour. Investors await a key speech on Wednesday afternoon by Reserve Bank of Australia governor Philip Lowe.
The three major US indices extended gains for the third consecutive trading day, with more Big Tech quarterly earnings to come. The Dow Jones Industrial Average was up 0.8%, the S&P 500 rose 0.7%, and Nasdaq gained 0.75%.
Cyclical stocks outperformed the growth sectors. Energy jumped more than 3% again amid the undersupply issue and strong oil prices. Chevron Corporation was up 2.6%, and Occidental Petroleum climbed 4.3%. Financials, industrials, and materials all finished more than 1% higher. Bank stocks mostly rose amid rising bond yields. JP Morgan Chase was up 1.8%, Wells Fargo jumped 3.5%, and Citigroup climbed 2.1%.
The big tech stocks closed mixed. Amazon, Meta Platform, and Alphabet were all up by more than 1%, while Apple and Microsoft closed lower. Google-parent Alphabet jumped 6% in after-hours trading after it beat both earnings and revenue in the fourth quarter. The company also announced a 20-for-1 stock split in July. Facebook-parent Meta Platforms and Amazon’s earnings are due on Wednesday and Friday respectively.
US January ISM manufacturing PMI dipped to 57.6 from 58.7 in December. The data indicates supply issues and labor shortages are pressing on manufacturing output, which points to a potential slowing in the job creation data for the non-farm payrolls later this week.
US bond yields traded higher. The 10-year US Treasury yields slightly up to 1.804%, and the 2-year Treasury yield was at 1.175%.
The WTI futures price was up 0.23%, to $US88.23 per barrel. The crude oil prices are fading ahead of the OPEC+ meeting this week, while Ukraine-Russia tension holds.
The gold futures price was $US5.50 dollars higher, to $1,801.60. The gold price slumped $US50 dollar from the January high at $US1850 an ounce when tech shares started rebounding. The precious metal’s moves are mainly driven by market sentiment lately and rising bond yields are also a key factor putting pressure on the safe-haven asset.
The US dollar fell against the other major currencies amid stabilizing bond yields and risk-on sentiment. Commodity currencies including AUD, NZD were all up 0.9% again the dollar.
The crypto markets rebounded with Bitcoin touching $US39,000 briefly and Ethereum above $US2800 for the first time in two weeks. Bitcoin is up 17% from its low in January. Ethereum has surged 29% from its January low.