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US stocks mixed, USD index hits new pandemic high, gold down, oil steadies

Wall Street

Stocks across Asia are set to open higher as broader markets rebounded amid merging dip buys. The tech-heavy Nasdaq finished flat in the US at a one-year low amid mixed big tech earnings. Gold slumped as the US dollar rose to a fresh two-year high, while oil prices steadied above the $100 mark as EU members are close to finalizing a plan to gradually block Russia’s exports, backed by Germany.

Chinese stocks jumped on positive signs that China is getting covid outbreaks in Beijing under control and a possible easing of restrictions in Shanghai. Further stimulus measures are taken by Chinese officials also added to the optimism.

Australia and New Zealand day ahead

SPI futures rose 0.7%, pointing to a higher open on the ASX. Big cap stocks in mining and energy sectors are likely to rebound strongly amid optimism from China’s easing of lockdowns and Beijing’s policy on supporting infrastructure. The 14-year high inflation data recorded on Wednesday strengthens the bet of a rate hike by the RBA in May. However, based on April’s RBA statement, the RBA is also waiting on additional data for labor costs provided in the next wage price index released on May 18 and also factoring the pending national election on 21 May and its implications on an earlier rate rise. AUD’s spike was short-lived due to a firming USD.  

The NZX 50 rose 0.4% at the open. Pushpay’s shares jumped 2.4% to NZ$1.25, down from NZ$1.28 when the acquisition offer was disclosed on Tuesday. Air New Zealand’s (Air NZ) rights offer will expire in 3 trading days on May 2. The rights trading had stopped on April 26, with a premium price of over NZ$0.60, which indicated higher demand. Air NZ stocks have been advancing this week amid global optimism toward the airline sector. The local flag carrier shares opened slightly lower at NZ$0.875 today.

US and EU stocks

The Dow Jones Industrial Average rose 0.25%, the S&P 500 was up 0.21% and Nasdaq dipped 0.01%.
Tech stocks finished mixed. Microsoft jumped nearly 5%, while Alphabet declined 4% after the release of their respective earnings report. Telecommunication service stocks are the biggest laggards among the growth sectors as Meta Platforms slipped 3.2% ahead of the earnings result. Snap Inc. fell 5.4% and Twitter slipped 2%. However, Meta Platforms jumped 15% in after-hours trading on better than expected Q1 earnings results. The social platform reported daily active users of 1.96 billion, more than the estimated 1.95 million.

Airline shares also outperformed amid optimism toward border reopenings and a positive outlook from major carriers’ earnings reports, with both Delta Air Lines and United Airlines up 2.90%. However, Boeing’s shares tumbled 8% after a disappointing earnings result with a net loss of US$1.2 billion due to a deal made with Air Force One during President Donald Trump’s administration.

Energy stocks finished higher as oil rebounded. Both Devon Energy and Exxon Mobil advanced near 3% and Occidental was up 1.4%. 

The European major indices also rebounded along with the broader markets. Stoxx 50 rose 0.36%, CAC 40 was up 0.48%, DAX advanced 0.27% and FTSE 100 was up 0.53%.

Commodities

Crude oil prices steadied as investors assess the impact of ongoing lockdowns in China while keeping an eye on the progress of negotiations by EU members for a plan to gradually embargo Russia’s oil exports. 

WTI crude futures were up 0.44%, to US$102.15 per barrel, and Brent futures fell 0.28%, to US$104.91 per barrel. The natural gas price rose further, up 3.34%, to US$7.08 per MMBtu.

Precious metals were primarily hit by a spiking USD. NYMEX gold futures fell US$17.5, to US$1,886.6 per ounce, the lowest seen since February 25. Gold’s price fell for 5 out of the last 7 trading sessions, breaking the key support level at US$1,890, now approaching the next pivot support at US$1,842. Silver fell for the seventh straight session, down 0.95% to US$23.32 per ounce, the lowest since February 15.

Currencies

The US dollar index rose for the fifth consecutive trading day, to 102.96, a fresh pandemic high since March 2020. The Eurodollar slumped for 5 days in a row and fell to a 5-year low at 1.0554, the same level when Brexit happened. USD/JPY rebounded from a one-week low to 128.47 amid rising US bond yields.

The Australian dollar gave up early gains and finished flat against the US dollar at 0.7125. AUD/USD spiked to an intraday high at 0.7190 after the country recorded a 14-year high CPI number of 5.1% y/y, increasing the risk of an earlier than an anticipated rate hike in May’s board meeting.

Treasuries

US bond yields rose from two-week lows as the equities selloff took a breather. The 10-year US Treasury yield advanced to 2.83% and the 2-year Treasury yield rose to 2.59%.

The Australia 5-year bond yield steadied at 2.82% and the New Zealand 5-year bond yield rose to 3.59% from 3.49% the previous day.

Cryptocurrencies

Cryptocurrencies rebounded amid the risk assets’ comeback. Bitcoin rose 2.15% to $US39,225 and Ethereum was up 1.59%, to US$2,888.

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