Wall Street finished higher after the US reported cooler-than-expected PPI data, again proving a deceleration in inflation after last week’s light CPI data. The US October PPI printed at 8.0% year on year, lower than an 8.3% estimate, down from the prior month of 8.4%. The tech-heavy index, Nasdaq, gained 1.4% as US bond yields declined further on bets for Fed’s slowdown in rate hikes. Walmart’s beat on earnings expectations has also fuelled a rally in retailer stocks, adding to the rebounding optimism. The US dollar index fell to a 3-month low of above 106, boosting all the other major currencies, especially commodity currencies, such as the Australian dollar and New Zealand dollar to surge more than 1% against the greenback. However, the breaking news of Russia’s missiles across Poland’s border may add downside risks to the rally. And the yields on the US 10-year and 2-year bonds stayed inverted since July, deepening to the lowest since 1981.Click to enlarge the table
- Dow faces pivotal resistance of 34,000, which is high in August, and S&P 500 tests on the 4,000 mark. 9 out of 11 sectors in the S&P 500 finished higher, with Communication Services leading gains, up 1.74%. Healthcare and Materials lagged the broad performance, both down slightly. All the meta-cap tech giants, including Apple, Microsoft, Amazon, Alphabet, Netflix, Meta Platforms, and Tesla all closed in green.
- Walmart shares jumped 7% due to a beat on the third quarter earnings expectations, thanks to its discounted groceries sales. The retail giant reported earnings per share as $1.50 vs. the $1.32 estimated. The revenue is $152.82 billion vs. the $147.75 billion expected. Walmart has also provided positive guidance for the full-year result, along with a $20 billion share buyback plan.
- Taiwan Semiconductor Manufacturing’s shares surged 11% on the news that Warren Buffett’s Berkshire Hathaway bought more than $4.1 billion of its stocks, representing 1.2% of the company’s stakes.
- Despite China’s weak economic data, Hong Kong stocks surged for the fourth straight trading day, up 4%, fuelled by Chinese tech shares as the two nations’ leaders’ meeting ended with a positive outcome, which sparks hopes for decelerating regulatory issues amount these US-listed Chinese companies. Alibaba’s shares soared 11%, Baidu jumped 9.3%, and JD.com rose 7.2%.
- Asian equity markets are set to open mixed despite the positive close on Wall Street. ASX futures were down 0.17%, Nikkei 225 futures rose 0.45% and Hang Seng Index futures slid 0.35%.
- Gold futures climbed to a 3-month high level of 1,782 due to a further decline of the US dollar, and bond yields, heading to the next potential long target of 1,840, the highest seen in late July.
- Crude oil rebounded amid China’s relaxing covid-curbs, a drop in the US dollar. Russia’s missile attack across the Poland border may also add to its upside pressure, which may further tighten Russia’s crude supply to the European countries that were originally planned to be fully banned towards the end of 2022.
- Bitcoin continued to stabilize above the recent low, up 2.5% in the last 24 hours. But risk sentiment may be still on the edge amid the FTX’s chaos. Traders are awaiting more progress with the company’s legal process on filing for Chapter 11 bankruptcy protection.
Disclaimer: CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.