Stocks fly as Fed Reserve suggests rate hikes to slow

 

Stocks climbed Wednesday as Federal Reserve Chair Jerome Powell confirmed that the central bank will slow the pace of its aggressive rate-hiking campaign that has weighed on markets.

Commodities prices, factory gate prices, energy prices and inflation expectations have all begun to slide from their record levels, suggesting to some that the pace of headline price growth is set to slow in 2023.

Cleary the action of the Fed is going to be the driving factor for every asset class into year end.

Overnight the Dow Jones Industrial Average was up 630 points, or 2.18 per cent. Meanwhile, the tech-heavy Nasdaq Composite jumped 4.4 per cent. The S&P 500 added 3.09 per cent. The Dow and S&P 500 are both set to end the month up more than 4 per cent, while the Nasdaq Composite is on track to gain around 3 per cent.

In company news further M&A in the biotech sector as Horizon Therapeutics shares surged on Wednesday after the company confirmed that it was in preliminary takeover negotiations with three major pharmaceutical companies, in what could be the biggest healthcare deal of 2022.

Across the sectors tech was the standout with string performance form the likes of Netflix, Meta, Nvidia & Atlaissian all rising around 8 per cent on the day.

Best performing thematics included EV charger, solid state battery companies and Tesla related companies.

And in hydrogen news Rio Tinto’s chief scientist has fired a shot across the bows of companies and governments banking on green hydrogen “hype” as a solution to global warming, saying the company does not see hydrogen as a serious alternative to fossil fuels as an export commodity. Speaking at Rio’s London investor day on Wednesday, Rio chief scientist Nigel Steward said the company did not believe hydrogen could be used as an "energy carrier" in the near future, given its production costs and problems with shipping it around the globe. "Hydrogen is much hyped, particularly as an energy carrier. We don’t see hydrogen as being used as an energy carrier" he added.
 
Futures

The SPI futures are pointing to a 0.7 per cent gain.

Currency

One Australian dollar at 8:10 AM has strengthened compared to the US dollar yesterday buying 67.87 US cents (Wed: 66.89 US cents).

Commodities

Iron ore futures are flat. Gold added 1.1 per cent. Silver gained 4.4 per cent. Copper rose 4.1 per cent and oil gained 3.1 per cent.

Figures around the globe

Across the Atlantic, European markets closed higher. Paris added over 1 per cent, Frankfurt rose 0.3 per cent and London’s FTSE closed 0.8 per cent higher.

In Asian markets, Tokyo’s Nikkei fell 0.2 per cent, Hong Kong’s Hang Seng gained 2.2 per cent and China’s Shanghai Composite closed flat.

Yesterday, the Australian sharemarket added 0.4 per cent to close at 7284.

Ex-dividends

NB Global Corporate Income Trust (ASX:NBI) is paying 0.7111 cents unfranked
Pendal Group (ASX:PDL) is paying 3.5 cents fully franked
Technology One (ASX:TNE) is paying 12.82 cents 60 per cent franked

Dividends payable

Dicker Data (ASX:DDR)
New Energy Solar (ASX:NEW) 

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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