Stocks closed higher amid volatile trading Thursday as investors remained concerned about the path of the Federal Reserve’s rate hikes.
The moves came a day after the Fed released the minutes of its most recent meeting, which concluded February 1st, showing that members of the central bank are resolved to keep fighting inflation with rate hikes.
Inflation “remains well above” the Fed’s 2 per cent target with a very tight labor market a driving factor.
Interestingly economists estimate that about 40 per cent of inflation is supply-driven, 40 per cent is demand-driven, and the other 20 per cent is ambiguous.
Overnight the S&P 500 was up 0.5 per cent, while the Dow Jones Industrial Average gained 0.3 per cent. The Nasdaq Composite rose 0.7 per cent. The major averages wavered after starting the day on a high note.
Thursday’s declines put the major averages down more than 2 per cent for the week.
Thematic wise, shares in defence companies have surged in recent months, eclipsing gains for wider stock markets, as investors bet on the promises of increased military spending by western governments to help Ukraine’s war effort against Russia.
An MSCI global benchmark for the sector is up almost 30 per cent in dollar terms since the start of October, 15 percentage points more than the broader gauge of worldwide equities.
In company news, Bill Gates has bought a nearly 3.8 percent stake in Heineken, worth $939 million despite previously saying he wasn’t much of a beer drinker.
Nvidia spiked 14 per cent after the company topped expectations on the top and bottom lines in its most recent quarter. Wall Street analysts approved of the results, saying AI opportunities will drive growth for the chipmaker.
Lucid Group, the electric vehicle maker, tumbled more than 11 per cent after posting fourth-quarter revenue that fell short of analysts’ expectations. The fall joins several electric vehicle startups, including Rivian, Lordstown Motors, and Nikola, which have reversed much of their gains this year.
Shares of Netflix were under pressure on Thursday after the Wall Street Journal reported that the company was cutting prices in over 30 countries. The stock closed 4.4 per cent lower on the day.
Across the sectors Information Technology was the best performer, closely followed by Energy, which rallied off the price of crude oil.
Futures
The SPI futures are pointing to a 0.1 per cent gain.
Currency
One Australian dollar at 8:10 AM has strengthened compared to the US dollar yesterday buying 68.10 US cents (Wed: 68.05 US cents).
Commodities
Iron ore futures are pointing to a 0.54 per cent gain.
Gold lost 0.6 per cent. Silver dropped 1.6 per cent. Copper fell 3.2 per cent and oil gained 2.2 per cent.
Figures around the globe
Across the Atlantic, European markets closed mixed. London’s FTSE fell 0.3 per cent, Frankfurt added 0.5 per cent while Paris closed 0.3 per cent higher.
In Asian markets, Tokyo’s Nikkei was closed, Hong Kong’s Hang Seng fell 0.4 per cent while China’s Shanghai Composite closed 0.1 per cent lower.
Yesterday, the Australian sharemarket closed 0.4 per cent lower at 7285.40.
Ex-dividends
BlueScope Steel (ASX:BSL) is paying 25 cents fully franked
Deterra (ASX:DRR) is paying 12 cents fully franked
Estia Health (ASX:EHE) is paying 3.7 cents fully franked
Fiducian Group (ASX:FID) is paying 12.3 cents fully franked
G.U.D. Holdings (ASX:GUD) is paying 17 cents fully franked
Ingenia Group (ASX:INA) is paying 5.2 cents unfranked
Johns Lyng Group (ASX:JLG) is paying 4.5 cents fully franked
Newcrest Mining (ASX:NCM) is paying 50.4 cents fully franked
Peoplein (ASX:PPE) is paying 7 cents fully franked
Pental (ASX:PTL) is paying 1.3 cents fully franked
TABCORP Holdings (ASX:TAH) is paying 1.3 cents fully franked
Dividends payable
Aspen Group (ASX:APZ)
BWP Trust (ASX:BWP)
Goodman Group (ASX:GMG)
HealthCo Healthcare and Wellness REIT (ASX:HCW)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Disclaimer
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