Technology stocks struggle in rising rate environment

 

US equities were lower in very quiet Monday trading. Stocks fell on Monday as traders fought to regain their footing from the prior week’s sell-off amid increasing concerns over rising rates and tighter US monetary policy.

The week ahead will see investors focused on China’s PMI, the Eurozone CPI on Wed and the US jobs report on Friday

Monday’s stock moves also coincided with the yield on the 2-year Treasury note notching a fresh 15-year high as rate hike fears persisted

The Dow Industrial Average slid 0.57 per cent,. The S&P 500 slipped 0.67 per cent and the Nasdaq Composite slumped 1.02 per cent

During Monday’s session, the Dow briefly turned positive after falling more than 300 points earlier in the day. 3M and Salesforce were the biggest laggards in the 30-stock Dow Industrials. Those losses were mitigated by nearly 1 per cent advances in Walmart and Chevron..

Tech was the worst-performing S&P 500 sector as rates rose, while energy and utilities outperformed.

Tech hardware, semis, software, media and entertainment, pharma, credit cards, trucking, airlines among the worst performers.

Energy was the standout on a good day for crude. Oil prices settled up more than 4 per cent on Monday, extending last week’s gain, as potential OPEC+ output cuts and conflict in Libya helped to offset a strong US dollar and a dire outlook for US growth.

Of note overnight Honda and LG Energy Solution said overnight that they would jointly build a battery plant in the United States for a slate of new electric cars the automaker is working on.
Moderna is suing Pfizer and BioNTech, accusing the companies of infringing on Moderna’s patents for the mRNA technology used to develop the Covid-19 vaccine.

Abbott will restart production of its Similac baby formula. The reopening of a Michigan plant that had been shut in February over contamination concerns is meant to ease a US shortage of baby formula. The factory closure of course was a gift for Australian producers like BUBS.

The first entirely hydrogen-powered passenger train service debuted last week in northwest Germany. The trains can run all day – up to 620 miles – on a single tank of hydrogen,

Currencies

The US dollar was weaker against euro but firmer on yen and sterling crosses. Dollar index earlier touched its highest levels since 2002. Investors have stepped up their wagers against the euro. Bets that the currency has further to fall reached their highest level since March of 2020. The culprit: sharply rising energy costs in Europe.

One Australian dollar has strengthened compared to the US dollar yesterday, buying 69.02 US cents (Mon: 68.86 US cents), 58.97 Pence Sterling, 95.75 Yen and 69.02 Euro cents.

Commodities

Iron ore futures are pointing to a 1.7 per cent fall.

Gold prices reversed course to trade flat on Monday as a dollar rally lost its steam

Silver was down $0.15 or 0.8 per cent to US$18.67 an ounce.

Copper fell $8.65 or 2.34 per cent to US$361.05 a pound.

Oil added $3.95 or 4.2 per cent to US$97.01 a barrel.

Futures

The SPI futures are pointing to a 0.3 per cent gain.

Figures around the globe

Across the Atlantic, European markets closed lower. Paris lost 0.8 per cent, Frankfurt fell 0.6 per cent while London’s FTSE was closed.

Asian markets closed mixed. Tokyo’s Nikkei dropped 2.7 per cent, Hong Kong’s Hang Seng fell 0.7 per cent and China’s Shanghai Composite closed 0.1 per cent higher.

Yesterday, the Australian sharemarket dropped almost 2 per cent to 6965.

Ex-dividends

There are nineteen companies set to trade without the right to a dividend.

Bapcor (ASX:BAP) is paying 11.5 cents fully franked
Beach Energy (ASX:BPT) is paying 1 cent fully franked
Capral (ASX:CAA) is paying 20 cents fully franked
Domino Pizza Enterpr (ASX:DMP) is paying 68.1 cents 70 per cent franked
Downer EDI (ASX:DOW) is paying 12 cents unfranked
ECP Emerging Growth (ASX:ECP) is paying 2.75 cents fully franked
Evolution Mining (ASX:EVN) is paying 3 cents fully franked
Gryphon Capital (ASX:GCI) is paying 1.06 cents unfranked
Kkr Credit Inc Fund (ASX:KKC) is paying 1.0938 cents unfranked
MA Financial Group (ASX:MAF) is paying 6 cents fully franked
Maxiparts (ASX:MXI) is paying 2.5 cents fully franked
Netwealth Group (ASX:NWL) is paying 10 cents fully franked
Perpetual Cred Trust (ASX:PCI) is paying 0.4661 cents unfranked
Sunland Group (ASX:SDG) is paying 15 cents fully franked
360 Capital Enhanced Income Fund (ASX:TCF) is paying 3 cents unfranked
360 Capital Group (ASX:TGP) is paying 8 cents unfranked
Teaminvest Private (ASX:TIP) is paying 0.3 cents fully franked
Ventia Services Group (ASX:VNT) is paying 7.47 80
Winton Land (ASX:WTN) is paying 0.9609 cents unfranked

Dividends payable

There are five companies set to pay eligible shareholders today.

Australian Foundation Invest Comp (ASX:AFI)
BKI Investment Company (ASX:BKI)
DEXUS Property Group (ASX:DXS)
FSA Group (ASX:FSA)
US Student Housing REIT (ASX:USQ)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
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Source: Finance News Network