Proactive Investors
Published Sep 29, 2023 09:41
Updated Sep 29, 2023 10:00
The morning catch up: ASX expected to bounce after Wall St books back-to-back gains
The ASX is expected to bounce today after Wall Street booked back-to-back gains overnight.
“US equities ripped higher overnight, following reversals lower in crude oil, US yields and the US dollar. While it’s too early to suggest that all three problematic asset classes have topped out, initial signs are encouraging, particularly for those hoping for a rebound in equity indices,” IG Markets analyst Tony Sycamore said.
“In terms of economic data, 2Q GDP was left unrevised at 2.1% vs. 2.2% expected. Initial jobless claims edged higher to 204k, well below the 215k expected. Attention now turns to the release of the Fed's preferred measure of inflation, the Core PCE at 10.30 pm tonight, expected to fall to 3.9% in August from 4.2% in July. Keep in mind that if the US Government shuts down as soon as this weekend, it may delay the release of critical economic data, including the September CPI.”
ASX 200 futures are up 45 points, or 0.63% as of 7:45am AEST.
We’re expecting a quiet day today ahead of the AFL and NRL Grand Finals this weekend and the states’ respective celebratory public holidays.
Over the last few days, the ASX 200 has had to claw its way back from early losses, so let’s see what happens throughout the day as long lunches and grand final parades grip the cities.
Yesterday, the ASX 200 finished lower for a third consecutive session on what was a fairly uneventful day. The Index bounced between session highs of +0.32% and lows of -0.38% and is clearly struggling for direction.
The one bright spot for investors, but not for motorists, is the Energy sector, which was again a standout yesterday as oil prices tested US$95 a barrel for the first time since November 2022.
What happened overnight?
Here’s what we saw (source Commsec):
US markets
Rebounded on Thursday, led by the tech sector, while US Federal Reserve Chair Jerome Powell sidestepped investor concerns over interest rates at an event. Tech giants, including Nvidia (+1.5%), Meta Platforms (+2.1%) and Tesla (NASDAQ:TSLA) (+2.4%) drove the Nasdaq index higher as bond yields steadied ahead of a key US inflation report. Intel (NASDAQ:INTC) and Cisco Systems (NASDAQ:NASDAQ:CSCO) rose 1.7% and 1.3%, respectively, lifting the Dow Jones index. Technology services provider Trimble jumped 6.5% following an announcement that AGCO Corporation (NYSE:AGCO) will acquire an 85% stake in Trimble's agribusiness for US$2 billion.
European markets
Rose from six-month lows on Thursday after a jump in mining stocks, while German inflation rose less- than-expected in September, boosting investor sentiment. The basic resources index soared 2.2%, led by a 5% jump in Sweden- based Billerud after broker SEB raised the stock's rating to "buy." Germany's Thyssenkrupp (ETR:TKAG) jumped 6.5% after Handelsblatt reported that the company is in talks to sell 50% of its steel division to Czech billionaire Daniel Kretinsky. German consumer prices rose by 4.3% on the year in September after a reading of 6.4% in August (survey: 4.5%).
Currencies
Were stronger against the US dollar in European and US trade.
Commodities
Global oil prices slid by up to 2.1% on Thursday, as traders took profits after prices earlier soared to 10-month highs and some worries that high interest rates may weight on western economies and oil demand.
Base metal prices climbed on Thursday.
What about small caps?
The S&P/ASX Small Ordinaries (XSO) dropped 0.55% yesterday to 2,650.80.
There have been a few active small cap stocks this morning and you can read about the following and more throughout the day.
Read more on Proactive Investors AU
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