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Nasdaq extends losses ahead of key inflation data


Wall Street finished mixed one day ahead of the March CPI data as growth stocks, particularly the technology sector, lost steam, suggesting the US inflation may not be as positive as projected. The tech-heavy index, Nasdaq, fell 0.4%, while Dow was higher, buoyed by energy and financial stocks. The S&P 500 ended flat. The upcoming CPI is expected to cool further to 5.2% annually, but the core inflation may stick above 5.5%. Notably, the US bond yields rose for the third straight trading day as markets may start pricing in another rate hike by the Fed in May.

On the other hand, the US dollar continued to soften against most of the other major currencies, further boosting metal and energy prices. China’s positive economic data, such as new yuan loans, also added to the price momentum in growth-sensitive commodities, with the WTI futures up 2% to above $81 per barrel.

After a strong movement in the ASX on Tuesday, futures point to a higher open in the Australian markets as energy and financial stocks continue to shine on Wall Street, with futures up 0.34%. Elsewhere, the Hang Seng Index futures were slightly lower, and Nikkei 225 futures rose 0.54%.

Click to enlarge the table


Price movers:

  • 8 out of the 11 sectors in the S&P 500 finished higher, with energy, financials, and materials leading gains, all up more than 0.8%. The growth sectors, including technology and communication services, ended in the red for the second straight trading day, with both Microsoft and Amazon down more than 2% and Apple falling 0.9%.
  • IFM cuts global GDP growth to 2.8% this year and 3% in 2024 amid central banks’ rate hikes and the ongoing war in Ukraine. The organization also warned that the bank turmoil could have a contagion effect on the global economy, with “a hard landing, particularly for advanced economies — has become a much larger risk.
  • Apple is to open the first Apple stores in India next week, which will mark a step in diversifying its assembly operations beyond China. The company plans to open a store in Mumbai on 18 April and another in New Delhi on 20 April. Apple may also seek to develop its manufacturing base in India.
  • China’s new yuan loans hit a record of 10.6 trillion yuan ($1.54 trillion) in the first quarter as the Chinese government has been trying to boost the economy with stimulus measures, especially in the housing markets. Household loans jumped to 1.24 trillion yuan in March from 208.1 billion yuan in February. The property stocks led the Hang Seng index to gain 0.76% on Tuesday.
  • Bitcoin rose to 30,000 for the first time since June 2022 amid policy optimism as central banks are expected to scale back rate hikes and relax liquidities following the bank turmoil. Ethereum approached the 2,000 mark before pulling back to just under 1,900. Watch the trending video here.

ASX and NZX announcements/news:

  • No major announcements (continue to update).

Today’s agenda:

  • Japanese March PPI y/y.
  • US March CPI.
  • Bank of Canada’s rate decision. 
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