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Tech rebounds, oil steadies, US dollar falls

mega cap tech

Asia markets are set to open higher following a strong session in the US overnight. Tech stocks rebounded for the second trading day as risky assets found a base amid economic optimism and strong company earnings. SPI futures are indicating a 0.5% gain for the S&P/ASX 200 and the NZX 50 rose 0.3% in the first half-hour of trading.

US stocks

The broader markets gained for a second day in a row ahead of the January CPI data. The tech-heavy Nasdaq jumped 2.08%, and has recovered 9%, or near half of its losses from the January low. The Dow Jones Industrial Average was up 0.83%, the S&P 500 gained 1.45%.

The big techs mostly finished higher. Facebook parent Meta Platform rebounded more than 5% as investors looked to buy the dip after the company lost a third of its market value. Microsoft was up 2.18%, and Alphabet gained 1.59%, Apple climbed 0.82%. Amazon was slightly lower.

Chipmakers including Advanced Micro Devices and Nvidia were up. Snap jumped more than 7%, the animation social platform up to more than 60% since it reported strong fourth-quarter earnings last week.

Disney rose 3.36% and the share price jumped 6% in after-hours trading. Disney+ added 129.8 million subscribers in the fourth quarter, smashing consensus at 125.75 million. The entertainment giant expects the streaming business to be stronger in the second half-year in 2022.

The US-listed Chinese tech giants rallied for a second day after an inflow of state-backed funds. Alibaba gained more than 3% after Softbank confirmed it would not sell its stake of the e-commerce giant. Baidu and JD.com were up 2.28% and 3.9% respectively.  

Treasuries

The US bond yields paused ahead of the CPI data. The 10-year US Treasury yield fell slightly to 1.944 after hitting a fresh 2-year high at 1.97% the previous day. The 2-year US Treasury yield traded at 1.362%.

The UK 10-year Gilt yield traded at a 3-year high at 1.43%. The Euro 10-year Bund was at 0.22%, the highest since February 2019.

Commodities

WTI crude oil rose slightly to $US90 as the US inventory data showed the biggest weekly draw in three years, while the Ukraine-Russia crisis is intensifying.

Gold broke above key resistance at $US1,830, up $US5, to $US1,833 per ounce.

Currencies

The US dollar fell on falling bond yields and the risk-on sentiment. The dollar weakened the most against major commodity currencies, such as the Australian dollar, New Zealand dollar, and Canadian dollar.

Cryptocurrencies

The major cryptocurrencies had another push to build reversal momentum. Bitcoin gained 1%, to $US44,632, testing the 50-day moving average resistance. Ethereum was up 4.3%, the highest in 4 weeks. Bitcoin rebounded 36%, and Ether recovered 50% from lows on January 27. 


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