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Wall Street off a session low despite a jump in rates

Wall Street

Wall Street bounced off a session low and finished mixed to kick off the week following Friday’s resilient job data, while rates extended gains for the second straight trading day, with the yield on the 2-year US bonds rising to above 4% again. The tech-heavy index Nasdaq closed marginally lower, and both Dow and S&P 500 rose slightly as investors probably hope the upcoming US CPI can offer positive signs for the inflation trajectory.

The relatively strong March non-farm payroll strengthened the odds for the Fed to continue its rate hike cycle. A jump in the US bond yields lifted the US dollar and sent commodity prices down, with gold futures falling 19 dollars per ounce to just above 2,000. Crude oil trimmed last week’s gains, with the WTI futures finishing below $80 per barrel.

Asian markets are set to open mixed. The ASX 200 futures slipped 0.30%, Hang Seng Index futures were flat, and Nikkei 225 futures fell 0.72%.

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Price movers:

  • 6 out of the 11 sectors in the S&P 500 finished higher, with materials and energy stocks leading gains, up 0.9% and 0.65%, respectively.  Meantime, the growth sectors, including technology and communication services, underperformed due to a jump in rates. Notably, the financial stocks were resilient ahead of big banks’ earnings results later this week, with Citigroup and Wells Fargo up more than 1% and JPMorgan Chase rising 0.33%.   
  • Apple’s shares fell 1.6% on the news that its Mac shipments fell 40.5% in the first quarter compared with a year ago. The market share dropped to 7.2% from 8.6%, with 2.8 million less than a year earlier due to the global headwinds, particularly China’s Covid disruptions.
  • The Hong Kong-listed SenseTime’s shares jumped for the second straight trading day, up 6%, after the Chinese AI firm unveiled its artificial intelligence-powered services, including the most popular ChatGPT-alike software, SenseChat.
  • USD/JPY surged 1% to above 133.50 after the BOJ’s new governor, Kazuo Ueda, indicated not to revise a joint statement between the government and the central bank regarding getting inflation back down to the 2% inflation target. Ueda will likely keep the ultra-loss monetary policy despite strong bets on his policy guidance to loosen the Yield curve control (YCC).  
  • Gold futures pulled back further on a strengthened USD and a surge in rates. But the metals managed to stay above 2,000. Gold may continue to retreat as the US dollar regains strength following relatively strong US non-farm payroll data.     
  • Bitcoin rose to above 29,000, a fresh 8-month high following the news that Ethereum Blockchain will serve its links to crypto mining, which will significantly reduce energy consumption. The remarkable upgrade in Ethereum may have sparked fears for fewer mining activities in Bitcoin and drove up the world-largest crypto price.

ASX and NZX announcements/news:

  • Chorus (NZX: CNU)’s total fiber connections increased by 15,000 to 1.01 million in the third quarter of FY23. The company said that a shortage in the field workforce restrained connection activity for much of the quarter, and extreme weather added to the further challenges.

Today’s agenda:

  • Australian Westpac Consumer Sentiment for April and NAB Business Confidence for March are due for release at 2:30 pm and 3:30 pm local time, respectively.
  • China CPI and PPI for March are due for release at 9:30 am at Beijing time.

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