US Stocks Mixed, USD Index Hits New Pandemic High, Gold Falls, Oil Stabilizes
SInventories across Asia are expected to open higher as broader markets rebounded amid the meltdown in buying dips. The tech-heavy Nasdaq ended flat in the U.S. at a one-year low amid mixed big tech earnings. Gold slumped as the US dollar hit a new two-year high, while oil prices stabilized above the $100 mark as EU members are on close to finalizing a plan to gradually block exports from Russia, backed by Germany.
Chinese stocks jumped on positive signs that China is controlling covid outbreaks in Beijing and a possible easing of restrictions in Shanghai. Further stimulus measures are being taken by Chinese officials, also adding to the optimism.
Australia and New Zealand on the eve
SPI futures rose 0.7%, indicating a higher open on the ASX. Large-cap mining and energy stocks are set to rebound strongly amid optimism over China’s easing of lockdowns and Beijing’s infrastructure support policy. The 14-year high inflation data recorded on Wednesday bolsters the bet of a rate hike by the RBA in May. However, based on the RBA’s statement from April, the RBA is also awaiting additional data on labor costs provided in the next Wage Price Index released on May 18 and also taking election into account. pending on May 21 and its implications for an earlier rate hike. The AUD spike was short-lived due to the strengthening USD.
The NZX 50 opened 0.4% higher. Shares of Pushpay jumped 2.4% to NZ$1.25 from NZ$1.28 when the takeover bid was disclosed on Tuesday. Air New Zealand’s (Air NZ) rights offering will expire in 3 trading days on May 2. Trading in the rights had stalled on April 26, with the price rising over NZ$0.60, indicating higher demand. Shares of Air NZ rose this week amid global optimism towards the airline industry. Shares of the local flag carrier opened a bit lower at NZ$0.875 today.
US and European stocks
The Dow Jones Industrial Average rose 0.25%, the S&P 500 rose 0.21% and the Nasdaq fell 0.01%.
Tech stocks ended mixed. Microsoft jumped almost 5%, while Alphabet fell 4% after the release of their respective earnings reports. Telecom services stocks lagged the most among the growth sectors, with meta-platforms falling 3.2% ahead of the earnings result. Snap Inc. fell 5.4% and Twitter 2%. However, Meta Platforms jumped 15% in after-hours trading on better-than-expected first-quarter results. The social platform reported daily active users of 1.96 billion, more than the estimated 1.95 million.
Airline stocks also outperformed amid optimism over the reopening of borders and a positive outlook for earnings reports from major carriers, with Delta Air Lines and United Airlines up 2.90% . However, Boeing shares fell 8% after a disappointing result with a net loss of US$1.2 billion due to a deal reached with Air Force One during the administration of President Donald Trump.
Energy stocks ended higher on the rebound in oil. Devon Energy and Exxon Mobil rose nearly 3% and Occidental 1.4%.
Major European indices also rebounded along with the broader markets. The Stoxx 50 rose by 0.36%, the CAC 40 by 0.48%, the DAX by 0.27% and the FTSE 100 by 0.53%.
Crude oil prices have stabilized as investors assess the impact of ongoing lockdowns in China while keeping an eye on the progress of negotiations by EU members for a phased export embargo plan oil from Russia.
WTI crude futures rose 0.44% to US$102.15 a barrel, and Brent crude futures fell 0.28% to US$104.91 a barrel. The price of natural gas rose again, up 3.34% to US$7.08 per MMBtu.
Precious metals were mainly affected by the surge in the USD. NYMEX gold futures fell US$17.5 to US$1,886.6 an ounce, the lowest since Feb. 25. $1,842. Silver fell for the seventh straight session, down 0.95% to US$23.32 an ounce, the lowest since Feb. 15.
The US dollar index rose for the fifth straight trading day to 102.96, a new pandemic high since March 2020. The eurodollar fell for 5 straight days and fell to a 5-year low at 1 .0554, the same level when Brexit happened. USD/JPY rebounded from a one-week low at 128.47 amid rising US bond yields.
The Aussie dollar gave up early gains and finished flat against the US dollar at 0.7125. AUD/USD hit an intraday high of 0.7190 after the country posted a 14-year CPI of 5.1%, raising the risk of an earlier-than-expected rate hike at the meeting. May Board of Directors.
US bond yields rose from two-week lows as the selloff in equities took a breather. The 10-year US Treasury yield rose to 2.83% and the 2-year Treasury yield to 2.59%.
The Australian 5-year bond yield stabilized at 2.82% and the New Zealand 5-year bond yield rose to 3.59% from 3.49% the previous day.
Cryptocurrencies rebounded amid the return of risky assets. Bitcoin rose 2.15% to US$39,225 and Ethereum rose 1.59% to US$2,888.
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