Wall Street bounced off a session low and finished higher though bond yields jumped for the second straight trading day. Following strong US bank earnings results from last week, investors scaled back bets on a sooner peak in rate hikes by the Fed, with the US 2-year bond yields rising to a one-month high of 4.2%. The US dollar regained ground, weakening the other major currencies and sending commodities down.
The US tech earnings season will kick off with Netflix and Tesla on Wednesday and Thursday, respectively. While both companies are expected to post a decline in earnings per share, their guidance will be more of a market mover.
Asian markets are set to open lower. The ASX 200 futures slipped 0.23%, the Hang Seng Index futures were down 0.52%, and Nikkei 225 futures rose 0.21%.
Price movers:
- 8 out of the 11 sectors in the S&P 500 finished higher, with real estate and financials leading gains, up 2.23% and 1.13%, respectively. The growth sectors, such as consumer discretionary and technology, edged higher, but communication services fell, dragged by Meta Platforms, which shares were down 1.17%. Energy stocks also underperformed due to a drop in oil prices.
- Apple launched its Apple Card savings account with 4.15% interest rate. The yield is much higher than the nation’s average of 0.35%, which may gather traction from depositors. The account requires a minimum deposit, and users must have an Apple Card to open the savings account.
- Alphabet’s shares dropped 2.6% on the news that Samsung may replace Google Search with Microsoft Bing as the ChatGPT-powered searching tool becomes popular. Google’s rush to launch a similar chatbot, Bard, failed to answer basic questions at a press conference in early February.
- Gold futures fell for the second straight trading day to just above 2,000 as the USD strengthened amid re-rampant rates. The precious metal surged to above 2,050, approaching an all-time high of 2,070 last week due to strengthened bets for a sooner peak in Fed’s rate hikes.
- Crude oil retreated due to a strengthened US dollar. But oil prices stayed above $80 ahead of the upcoming Chinese first-quarter GDP and other influential economic data, such as retail sales and industrial production, later today.
- Bitcoin retreated from a 9-month high of above 30,000 as strengthened USD pressed cryptocurrencies.
ASX and NZX announcements/news:
- No major announcements (continue to update).
Today’s agenda:
- RBA meeting minutes for April. The Australian unemployment rate for March stayed at a historically low level, which may keep inflation elevated. The Reserve Bank indicated to keep rising rates if needed.
- Chinese Q1 GDP. A steady recovery of the Chinese economy is expected, which may offer a bullish factor to growth-sensitive commodities, such as copper and oil prices.
Disclaimer: CMC Markets is an order execution-only service. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
