Wall Street finished mixed after the Fed raised the interest rate by 25 basis points to between 5.25% and 5.50%, the highest level since 2001. The move was widely expected, but markets responded with a dovish hike as Chairman Powell said the future policy would be “data-dependent”. The US bond yields fell following the rate hike, sending the US dollar lower, suggesting the Feds’ hiking cycle could be very close to an end.
In big techs, Microsoft’s shares slid 3.7%, dragging on the broad performance, and Alphabet jumped 5.8%, offsetting some losses in the Nasdaq. Meta’s stocks rose 6% in after-hours trading amid strong earnings reports. Overall, most tech companies beat expectations this week, but results painted a mixed picture. A slowdown in revenue growth and squeezed profit margins are seen in some of the major companies, like Microsoft, Netflix, and Tesla. Apple and Amazon’s earnings can be crucial to gauge market sentiment next week.
Most Asian markets finished lower, but the ASX 200 outperformed after the country reported lighter-than-expected CPI data for June. Futures point to a mixed open across Asian equity markets, with the ASX 200 futures down 0.01%, Hang Seng Index futures up 0.86%, and Nikkei 225 futures slid 0.31%.
- 6 out of 11 sectors finished higher in the S&P 500, with Technology leading losses, down 1.3%. Telecommunication Service was the best performer, up 2.65%. Financial and industrial sectors continued to outperform amid the sector rotation, up 0.65% and 0.66%, respectively.
- Meta’s shares rose 6% in after-hours trading amid strong second-quarter earnings reports. The social media reported earnings per share as US$2.98, beating an estimated US$2.91. The revenue was US$32.0 billion, also topping $31.12 billion as expected, up 11% year over year, returning to double-digit growth. The Daily Active Users (DAUs) reached 2.06 billion, and Monthly Active Users (MAUs) was 3.03 billion, all higher than expectations.
- The Barbie movie-heated stock Mattel’s shares rose slightly amid a beat on earnings expectations. The toy manufacturer’s earnings per share was US$0.10, topping an estimate of a loss of US$0.03, down 44% year over year. Net sales were US$1.087 billion, beating the US$1.02 billion expected, down 12% from a year ago. The stocks climbed about 20% in the past month due to the Barbie hype.
- In FX, safe currencies, such as the Eurodollar, the Japanese Yen, and the Swiss Franc, were higher, while commodity currencies, including the Australian dollar, the New Zealand dollar, and the Canadian dollar, weakened. Gold prices also jumped due to a softened USD and the bond yields, suggesting risk-off sentiment mounted following the Fed’s rate decision.
ASX and NZX announcements/news:
- Heartland Group Holdings Limited (NZX/ASX: HGH) will announce its FY2023 result on 24 August.
- Rio Tinto (ASX: RIO)’ s profits fell 34% to A$3.53 per share in the first half of 2023 on revenue of A$26.67 billion, down more than 10% from a year ago. The miner’s performance was significantly impacted by commodity prices due to China’s stumbled economic recovery.
- European Central Bank Policy Meeting
- US second-quarter GDP
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