Wall Street snapped a 5-day losing streak as investors continued to bet for the Fed’s slowdown in tightening policy at the back of cooling inflation. The most rate-sensitive sector, tech stocks, led broad gains, with Nasdaq up 1%. Traders are eyeing the upcoming US PPI data that is due for release later today, which will provide important clues to the inflation trajectory ahead of the November CPI data next week in conjunction with the Fed’s last policy meeting in 2022.
The US dollar index extended losses despite a rebound in bond yields overnight, pushing up commodity currencies and metal prices. On the other hand, crude prices fell for the fifth straight trading day to a fresh year-low level as oil futures continued to price in a recession-led gloomy demand outlook, dragging on energy stocks and sending European markets down, given a positive correlation between oil price and inflation this year.
The bright side is still centring on Chinese stocks as China is poised to rule out more easing measures on its property sector and Covid controls, which lifted the Hang Seng Index by 3% on Thursday. China’s CPI and PPI data will be on watch in today’s Asian session.
- Nasdaq outperformed broad markets as tech shares got lifted by the Fed bets. 9 out of 11 sectors in the S&P 500 finished higher, with Technology and Consumer Discretionary leading gains, both up more than 1%. Energy and Communication Services were the laggards, down 0.4% and 0.5%, respectively.
- Tesla shares cut early losses and finished slightly lower. The EV maker’s stocks were sold off sharply in the week due to a slew of negative news around concerns about its EV’s demand outlook and the financing burden on Twitter. However, it looks like all the negatives have been digested so far, the share’s price has bounced a session low of $169, which is near its one-year low level seen in late November.
- Asian equity markets are set to open higher. ASX futures were up 0.32%, Nikkei 225 futures advanced 0.58% and Hang Seng Index futures rose 0.50%. In ASX, miner stocks were still on their swift rebounding trend on China-fuelled optimism. However, oil and gas producers are under pressure due to the sharp decline in energy prices.
- Gold futures were higher, thanks to a softened US dollar, but it is still facing pivotal resistance around 1,800 at the 200-day moving average. The upside momentum seems to lose steam ahead of the US key inflation data next week.
- WTI futures gave up early gains, facing near-term key resistance of 75, approaching the further support of 70, as oil markets slumped further on recession worries. But should the US CPI rise again, oil may get a respite from the recent selloff.
- Cryptocurrencies had a decent rebound amid broad risk-on sentiment. Bitcoin climbed 2% to above 17,000 for the first time in one week and Ethereum rose 3.7% to 1,280. It looks like the digital world is on its rebounding pace from the FTX-induced crash.