US equity markets surge off lows despite higher than expected inflation data

14Oct

US equity markets surge off lows despite higher than expected inflation data

 

US equities finished higher in Thursday trading, near best levels after reversing a big decline from right after the open – this included the Dow Jones surging 1,500 points from peak to trough, as traders shook off another hot inflation report.

Stocks fell to session lows when the September consumer inflation report showed a larger-than-expected increase. The consumer price index increased 0.4 per cent for the month, more than the 0.3 per cent estimate from Dow Jones. On an annual basis, inflation was up 8.2 per cent.

The data indicated prices continued to climb at a brutally rapid pace in September, with a key inflation index increasing at the fastest pace in 40 years, bad news for the Federal Reserve as it struggles to wrestle the cost of living, back under control.

The inflation data has almost increased the certainty of another ¾ per cent rate rise in November. This confirmation helped markets rally off their lows.

The Dow Jones Industrial Average rose 2.83 per cent after being down more than 500 points earlier in the day. The S&P 500 climbed 2.60 per cent breaking a six-day losing streak. The Nasdaq Composite gained 2.2 per cent.

Across the sectors, Gains in energy and bank stocks led the rebound. Shares of Chevron gained 4.9 per cent as oil prices spiked, and bank stocks Goldman Sachs rose 4 per cent and JPMorgan 5.50 per cent. A reversal in big tech names such as Apple and Microsoft and a surge in semiconductors Nvidia and Qualcomm also contributed to the move higher.

In semiconductor news , Samsung Electronics has been given a one-year exemption from U.S. restrictions on exports of chip equipment to China. The move suggests the Biden administration is giving relief to American allies from the new rules which are roiling the industry.

The energy sector continues to attract investors attracted by dividend yields, low valuations and capital management initiatives like share buy backs.

A decade ago the Euro Stoxx oil and gas index traded at 10 times forward earnings. It is now at five times — at least in part because fossil fuels are widely perceived as on their way out of the energy mix.

Oil companies read low valuations as a signal to reduce investments in all but the very best new oilfields. Indeed, their capital expenditure has fallen a third over the past decade and as a result their cash flows are now becoming a haven for investors.

Currencies

One Australian dollar has strengthened slightly to the US dollar yesterday, buying 62.95 US cents

Commodities

Iron ore futures are pointing to a 1.4 per cent fall.

Gold shed $6.50 or 0.4 per cent to US$1671 an ounce.

Silver fell $0.11 or 0.6 per cent to US$18.83 an ounce.

Copper added $3.65 or 1.1 per cent to US$346.15 a pound.

Oil gained $1.92 or 2.2 per cent to US$89.19 a barrel.

Futures

The SPI futures are pointing to a 1.7 per cent gain.

Figures around the globe

Across the Atlantic, European markets closed higher. Paris added 1 per cent, Frankfurt gained 1.5 per cent and London’s FTSE closed 0.4 per cent higher.

In Asian markets, Tokyo’s Nikkei lost 0.6 per cent, Hong Kong’s Hang Seng dropped 1.9 per cent and China’s Shanghai Composite shed 0.3 per cent.

Yesterday, the Australian sharemarket lost 0.1 per cent to close at 6643.

Ex-dividends

Harvey Norman (ASX:HVN) is paying 17.5 cents fully franked
Lion Selection Group (ASX:LSX) is paying 1.5 cents unfranked

Dividends payable

29Metals Ltd (ASX:29M)
BSP Financial Group Ltd (ASX:BFL)
Cash Converters International Ltd (ASX:CCV)
Coventry Group Ltd (ASX:CYG)
Cryosite Ltd (ASX:CTE)
Embelton Ltd (ASX:EMB)
Fonterra Shareholders Fund (ASX:FSF)
Gale Pacific Ltd (ASX:GAP)
HUB24 Ltd (ASX:HUB)
Imperial Pacific Ltd (ASX:IPC)
Link Administration Holdings Ltd (ASX:LNK)
London City Equities Ltd (ASX:LCE)
Peet Ltd (ASX:PPC)
Pepper Money Ltd (ASX:PPM)
Teaminvest Private Group Ltd (ASX:TIP)
XRF Scientific Ltd (ASX:XRF)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Copyright 2022 – Finance News Network


Source: Finance News Network

Share this post

Related Posts

03Apr

Stocks rally into strong quarter end

03 Apr 2023 - Stocks climbed higher on Friday to end the quarter with a bang after the market got a boost after the Fed’s preferred inflation gauge showed a cooler-than-expected increase in prices.

Read More
27Aug

Afterpay’s (ASX:APT) EBITDA up 73%: ASX poised to open higher

27 Aug 2020 - The ASX looks set to open higher this morning with technology stocks leading Wall Street and global markets seeing a rise overnight. Facebook, Amazon and Microsoft made gains and Netflix shares rose after a pleasing analyst report. Afterpay’s (ASX:APT) shares price continues to soar as it releases it fourth quarter performance results today reporting a 73% lift in EBITDA.

Read More
06Sep

Construction decline eases in August: ASX tracking 0.5% higher at noon

06 Sep 2019 - The ASX opened higher and continued to rise at the open and is now tracking 0.5% higher at noon. Cooper Energy (ASX:COE) shares shot up almost 10% after their announcement that the exploration well Annie-1 has made a new gas field discovery in the Otway Basin offshore Victoria. Kalium Lakes (ASX:KLL) Beyondie Sulphate of Potash Project has been granted Major Project Status by the Australian Federal Government.

Read More
28Aug

Market wraps 0.9% lower: Down 0.6% over week

28 Aug 2020 - The ASX retreated during the first half of the session. It recovered some ground over the afternoon but left the run a little late finishing 0.9 per cent lower for the day. Credit Suisse has upgraded IGO (ASX:IGO) to an Outperform, with a 12-month price target of $4.35.

Read More
16Feb

Australian businesses grow 2% in 2019-2020: ASX tracking 0.5% at noon

16 Feb 2021 - The ASX lifted during the early trading hours and is tracking 0.5% higher or 35 points higher at noon at 6,904. On the futures market the SPI is 37 points higher. Codan (ASX:CDA) has entered into an agreement to acquire 100% of the shares in US-based company, Domo Tactical Communications.

Read More
29Jan

Air New Zealand (ASX:AIZ) supports biofuels mandate: Aus shares set to open higher

29 Jan 2021 - The Australian share market is set to swell at the open, following positive tailwinds from the US. All 3 major US benchmarks rebounded after their worst day of trade in three months. Oil, gold and iron ore however all dropped overnight. Air New Zealand (ASX:AIZ) has come out in support of the New Zealand Government’s decision to implement a biofuels mandate that it says will help the country reduce carbon emissions in the transport sector.

Read More
08Feb

Vocus charges ahead on takeover talks: ASX 0.6% higher at noon

08 Feb 2021 - The S&P/ASX 200 Index is up 0.6 per cent or 42 points at 6882 points. SPI futures are pointing to a rise of 44 points as we head into afternoon trade.

Read More
28Mar

S&P 500 sets new high as market bounces back

28 Mar 2024 - US markets bounced back after three consecutive losing sessions & extended their first quarter advance.

Read More
26Feb

US flash spike in treasury bonds drags equities down: Aus shares set to open lower

26 Feb 2021 - Aussie shares are poised to drop at the open following a retreat in US markets. Rising US bond yields seem to have spooked investors. The 10-year Treasury yield experienced a flash spike overnight, rising 0.2 per cent. Facebook has reversed its Australian news ban after the government compromised on its proposed media code which is currently making its way through the Senate. Victoria is expected to announce an easing of Covid-19 restrictions this morning as...

Read More
16Sep

Wall St mixed, Reece is a sell for Stock watch: ASX poised to dip

14 Sep 2021 - A mixed market with the major indexes across the globe as concerns on the pandemic recovery continue to linger ahead of the Fed meeting next week. European markets started the week on a positive note while Asian markets saw a fresh round of regulatory crackdowns. Oil prices rose boosting energy stocks. Metal prices remained elevated. Reece (ASX:REH) is looking soft for a number of reasons covered in Stock watch.

Read More