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US stocks rebound as investors brace for rate hikes, bond yields higher, oil, gold down

stocks rebound

Asia markets are set to open higher following the tech-led strong rebound in the US markets overnight. Investors piled into growth stocks despite spikes in the bond yields, while embracing the Fed’s aggressive tightening policy, and the Ukraine crisis. A dip in the oil price also added to the optimism.

SPI futures are indicating a 0.4% gain at the start of trading in Australia and the NZX 50 is down 0.6%.

US and EU stocks

The Dow Jones Industrial Average was up 0.74%, the S&P 500 climbed 1.13%, and Nasdaq advanced 1.95%.

The growth stocks led the broader markets gains, with all of the mega-caps, such as Apple, Microsoft, Amazon, Alphabet, and Meta Platforms, all up between 1-3%. Tesla Motors jumped near 8% after the company officially opened its first factory in Germany. 

The US-listed Chinese tech stocks all jumped amid hopes for further stimulus measures to be taken by Beijing. Alibaba’s shares soared 11% after the e-commerce giant said it would ramp up its share buyback program by US$25 billion.

Bank stocks also cheered for the rising bond yields. JPMorgan Chase rose near 2%, Wells Fargo was up 4.3%, and Citigroup climbed 0.87%.  

Airline shares resumed gains on the moderating oil price. Delta Airlines and American Airlines were both up more than 2.0%. United Airlines rose 3.3%.

On the earnings front, Nike beat market expectations in its fiscal third-quarter results, while raising concerns about inflation and supply chains caused by war. The company’s shares jumped 7% initially but cut gains and finished 2.3% higher.

European stocks all finished higher, with Euro Stoxx 50 up 1.14%, DAX rising 1.02%, and CAC 40 climbing 1.17%. The FTSE 100 added 0.46%.

Treasuries

The US treasury yields continue to rise as the odds for a 50-basis-points-hike strengthened after the Fed Chair Jerome Powell’s remarks on Monday. The 10-year US Treasury yield rose to 2.38%. The 2-year Treasury yield moved higher to 2.16% on Tuesday.

In Europe, Germany 10-year Bond Yield went up to 0.50%, and the France 10-year Bond Yield rose to 0.96%. The UK 10-year Gilt yield was down to 1.71%.

Commodities

Oil prices dipped on fading expectations for the EU to join the US oil embargo to Russa’s export, despite an unexpected weekly sharp drop in the US crude stockpiles ended March 17 according to the API data.

The WTI fell 1.11%, to US$108.75 per barrel, and the Brent crude finished 1.85% lower, to $114.53 per barrel.

Gold was also lower as risk-on trades took the lead in the broader markets again. The NYMEX gold futures fell $8, to $1,921.5 per ounce. Silver declined 1.63%, to $24.9 per ounce.

Currencies

USD weakened against commodity currencies and strengthened further against the Japanese Yen. AUD and NZD continue to rise against most of the major currencies on the rising export prices and strong economic outlook. USD was up 1.13% against JPY as the US treasury selloff deepened on the surging US bond yields. EUR/USD consolidated above the 1.1-mark.

Cryptocurrencies

The global crypto market cap increased 3.13%, to $1.93 trillion in the last 24 hours. The major cryptocurrencies rallied, with both Bitcoin and Ethereum up more than 3%, to just above US$42,700 and US$3,000 respectively. Cardano jumped 7.81%, to US$0.97. Cardano outperformed most of the major digital tokens in the past week, up 21% in the last 7 days.

The Crypto investor Katie Haun has raised US$1.5 billion for her new firm, aiming to fund the Web3 development. 


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