US stocks boosted as investors digest stronger-than-expected retail sales data

 

Stocks ticked higher Wednesday as traders mulled stronger-than-expected retail sales along with the latest US inflation data.

Later this week, traders will also be listening to speeches from Federal Reserve officials for any signs of what the central bank may do at its next meeting in March

The Dow Jones Industrial Average gained 0.11 per cent, rallying more than 250 points from its intraday low. The S&P 500 ticked up 0.28 per cent. The Nasdaq Composite rose 0.92 per cent, boosted by shares of Airbnb, which surged 13.35 per cent after beating earnings expectations. Gains in Tesla, Rivian and Lucid also helped lead the index higher.

Stocks slipped early in the session when a report showed January retail sales rose 3 per cent, while economists polled by Dow Jones anticipated a 1.9 per cent increase. The number signals that the U.S. economy is holding up despite increased rate hikes by the Federal Reserve to tame inflation.

Analysts noted that the labour market’s resilience is the main reason consumers continue to spend and as long as that’s the case, inflation is likely to remain sticky, it's looking more likely the Fed is going to need to raise rates higher – and hold them higher for longer – higher than people currently expect and this is going to cause markets to go through some significant volatility as stock and bond markets are priced for benign scenarios and not the more difficult one that we are headed towards.

This week investors will also continue to watch earnings results. Zillow, Shopify and DoorDash are some of the companies scheduled to report this week.

In company news, Berkshire Hathaway disclosed that it had unloaded most of its holdings in Taiwan Semiconductor Manufacturing Company, a move that pushed the chip maker’s stock into the red. Berkshire bought a nearly $5 billion stake in November, and apparently sold at a big profit. Its not often Warren Buffet flips a stock 3 months later.

Glencore profits have hit a record $34bn driven by soaring coal demand Glencore has reported record full-year earnings driven by high energy prices and the Ukraine war, highlighting how trading houses have been among the biggest beneficiaries of the energy crisis.

Australia’s Plans to Curb China's Lithium Dominance has been Hit by Delays after Wesfarmers Ltd. stated that the start of the plant in Western Australia has been pushed back to the first half of 2025. Elsewhere, the two other Western Australia refineries are yet to begin commercial-scale export after delays and cost blowouts.

S&P 500 sectors closed mostly higher overnight. Communication Services and Consumer Discretionary and were the biggest winners, whilst Energy, was the biggest under performer.

Futures

The SPI futures are pointing to a 0.5 per cent gain.

Currency

One Australian dollar at 8:10 AM has weakened compared to the US dollar yesterday buying 69.07 US cents (Wed: 69.87 US cents).

Commodities

Iron ore futures are pointing to a 0.05 per cent gain. Iron ore is 0.1 per cent lower at US$123.60 tonne.

Gold lost 0.9 per cent. Silver fell 1.1 per cent. Copper dropped 1.2 per cent and oil lost 0.6 per cent.

Figures around the globe

Across the Atlantic, European markets closed higher. London’s FTSE added 0.6 per cent, Frankfurt gained 0.8 per cent while Paris closed 1.2 per cent higher.

In Asian markets, Tokyo’s Nikkei fell 0.4 per cent, Hong Kong’s Hang Seng lost 1.4 per cent while China’s Shanghai Composite closed 0.4 per cent lower.

Yesterday, the Australian sharemarket closed 1.1 per cent lower at 7,352.

Ex-dividends

Insurance Australia (ASX:IAG) is paying 6 cents 30 per cent franked
Korvest (ASX:KOV) is paying 25 cents fully franked
Scentre Group (ASX:SCG) is paying 8.25 cents unfranked
Wotso Property (ASX:WOT) is paying 3 cents unfranked

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

Disclaimer

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