Morning traders. Thanks loungers, especially @Ravgnome.
Outlook for the day: Negative as commodity price declines outweigh a record close on Wall Street. The ASX 200 surged 1.47% on Friday as positive trading updates from several megacap tech giants signalled a strong end to the US trading week.
ASX futures: down 54 points or 0.7%
Friday themes:
US stocks fly to fresh highs as strong trading updates from Amazon and Meta Platforms overshadows the threat of rate-cut delays following a knockout January jobs report.
The S&P 500 closes at a fresh record. All three major indices log a fourth week of gains.
Meta Platforms soars 20.32% after smashing analyst expectations for last quarter and announcing its first-ever dividend payment. A 14% increase in Q4 revenue helps lift Amazon 7.87%. Apple is a minor drag as a decline in China sales helps drag the share price down 0.54%.
The earnings reports help the market shrug off unexpectedly strong January jobs data that could push back the start of the rate-cutting cycle. The US economy added a massive 353,000 jobs last month, almost twice as many positions as economists expected. Bond markets respond by driving up the 10-year treasury yield by a huge 17 basis points, back above 4%. The odds on a March rate cut fall to 20.5%, after being nearer 70% last month.
“The price action today is a display that tech can decouple from the rates narrative and trade more on fundamentals. You’re in this window where tech can trade higher despite where rates are going, and that’s catching people off guard” - Dylan Kremer, chief investment officer at Certuity (per CNBC).
Growth stocks outperform in a divided market. The three sectors dominated by Big Tech (I.T., consumer discretionary, communication services) gain between 1.32% and 4.69%. Industrials, financials and energy also rise. However, rate-sensitive utilities and real estate both lose more than 1.2%. Materials is also weak, shedding 0.57%.
For the week, the S&P 500 and Dow both gain around 1.4%. The Nasdaq puts on 1.1%.
BHP and Rio Tinto fall in overseas trade as iron ore slumps to a two-week low. China-traded ore sinks 2.23% in daytime trade. The most-traded contract loses more than 5% for the week as steel mills face calls for new environmental curbs and China's property woes continue.
Oil has its worst week since October, finishing at a three-week low. Brent crude drops 1.37% on Friday to extend its loss for the week to 6.8%. Prices sink as reports of a possible ceasefire deal between Israel and Hamas strips some of the "war premium" from the market, and as economic reports point to subdued business activity in much of the world.
The new-look RBA meets today ahead of an interest rate announcement and press conference tomorrow afternoon. The bank is switching to two-day meetings this year, in line with US practice, following an independent review. Other changes mean the bank only meets eight times this year, down from eleven times in previous years. The bank is expected to leave the cash rate target on hold tomorrow at 4.35%.
The domestic reporting season cranks into gear this week with updates from heavyweights including Amcor, AGL, Transurban and Boral. The season hits its stride properly next week.
Key events this week:
January job ads - 11.30 am AEDT
China services PMI - 12.45 pm
US services PMI - tonight
Interest rate decision and press conference - tomorrow
China inflation data - Thursday
House testimony by RBA Governor Bullock - Friday
S&P 500: up 52 points or 1.07%
Dow: up 135 points or 0.35%
Nasdaq: 267 points or 1.74%
Dollar: down 0.01% to 65.19 US cents
Iron ore (Dalian): down 2.23% to US$131.07
Brent crude: down US$1.37 or 1.7% to US$77.33
Gold: down US$17.40 or 0.84% to US$2,053.70
NYSE Arca Gold Bugs: down 3.42%
Bitcoin: down 0.9% to US$42,682
Copper (LME): down 0.62% to US$8,482
Nickel (LME): up 0.03% to US$16,235
Uranium (spot price): up 0.47% to US$109
Lithium carbonate (China spot): down 0.07% to US$13,509
