Wall Street finishes marginally higher to kick off the week ahead of major central banks’ decisions this week. The Fed is expected to pause rate hikes, but its stance on further moves can be critical for market trends. Overall, risk-off sentiment prevailed, with the fear gauge, the VIX, climbing higher to above 14, and gold futures rose for the second straight trading day. In the meantime, the IPO optimism continued to roll on following Arm, with the largest US grocery delivery company, Instacart, pricing IPO at US$30 per share at the top end of the indicative price range. Its shares will start trading under the symbol of “CART” on the US market open tonight.
The US dollar drifted lower despite US government bond yields staying at high levels, which helped the other major G-10 currencies to consolidate above their recent lows against the king dollar. Commodity prices were also mostly higher, particularly in oil and gas. The WTI futures rose above US$92 per barrel, a fresh 10-month high on under supply concerns. Natural gas jumped 3.8% to above US$2.7 per MMbtu.
The Chinese stock markets were wobbly due to the shaky property sector. China’s central bank’s LPR decision will be on close watch later this week when further cuts may help stabilize the markets. Futures point to a mixed open higher across the APAC region. The Nikkei 225 futures were down 0.77%, the ASX 200 futures slid 0.26%, and the Hang Seng Index futures climbed 0.06%.
- 6 out of 11 sectors in the S&P 500 finished higher, with Energy and technology leading gains, up 0.68% and 0.47%, respectively. Rising oil and gas prices are behind the energy sector’s outperformance. On the other hand, Tesla’s 3% slump weighed Consumer Discretionary, down 1.01%. Real Estate was also the laggard, slipping 0.81% due to high bond yields.
- Apple rose 1.7% to close a one-week high on dip-buys as fears of China’s ban faded and investors may see strong demands in its newly launched iPhone 15 handset. The tech giant also released iOS 17, which is the biggest software update of the year, featuring a customized contact poster, a better language model for autocorrection, and a new iMessage interface.
- USD/JPY were slightly lower ahead of the BOJ’s policy meeting later this week. The pair faced near-term resistance of about 147.85 and surfaced potential bearish divergence. While bets for a normalizing policy strengthened, the Japanese Yen stayed at the weakest level against the USD since November 2022.
- Bitcoin popped to above 27,000 for the first time since 31 August but pulled back to about 26,800 at the time of writing. The recent rebound in cryptocurrencies may be driven by bets for a sooner end of the Fed’s rate hiking cycle, which may boost liquidities in the markets, supporting bulls in the digital assets.
- The WTI futures approach key resistance of 94. With China’s expansive stimulus measures to aid its economy and OPEC+’s ongoing output cuts, traders see demands to outpace supply in the physical markets.
ASX and NZX announcements/news:
- Sky New Zealand (ASX/NZX: SKT) appoints a new CFO, Ciara McGuigan, who is the current CFO at TVNZ. Ciara will take the position in March 2024.
- RBA meeting minutes
- EU final CPI for August
- Canadian CPI for August
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