Stocks rose Thursday in an afternoon rally as traders tried to shake off concerns over higher interest rates.
The Dow Jones Industrial Average popped 341.73 points, or 1.05 per cent, to close at 33,003.57. The S&P 500 gained 0.76 per cent to close at 3,981.35. The Nasdaq Composite climbed 0.73 per cent, ending the session at 11,462.98.
The S&P 500 cut losses after Atlanta Federal Reserve President Raphael Bostic said he’s “firmly” in favor of sticking with quarter-point hikes.
A surge in labor costs and a pullback in jobless claims reported early Thursday to the likelihood that the Fed will raise its benchmark interest rate another 0.25 percentage point later this month.
And inflation is causing concern among both consumers and investors on both sides of the Atlantic. The European Commission has reported a worrying rise in consumer prices by 8.5 percent on an annualised basis across the eurozone last month. Core inflation, which excludes certain goods, also jumped to a record high of 5.6 percent in the 20 countries that use the euro.
Rising rates have implications for bank profits – US Banks profits fell 6 per cent last year as war, inflation and higher rates hurt results. However, the banks still made a profit of $263 billion, which is the biggest profit of any year except 2021. Higher interest rates pushed up net interest income 20 per cent, but noninterest income, which includes fees charged to consumers and corporate clients, fell about 3 per cent.
In company news, Tesla's CEO, Elon Musk, presented the company's long-term vision to produce 20 million electric vehicles per year by 2030 and build more production plants, but Wall Street analysts were unimpressed by the lack of specifics on how the company would achieve its goal, and the stock price fell after the investor presentation.
Salesforce's stock rose over 15 per cent in overnight trading after the cloud software company reported better-than-expected fourth-quarter results, including adjusted earnings per share of $1.68 on revenue of $8.38 billion, beating analysts' expectations of $1.36 EPS on $7.99 billion in revenue. Additionally, Salesforce announced plans to expand its share buyback program to $20 billion.
Overnight, all S&P 500 sectors except Consumer Discretionary and Financials finished higher. Utilities was the biggest winner, up 1.82 per cent.
Despite the 10-year Treasury yield climbing above 4 per cent, utility stocks have gained, representing a mild reversal for the sector which is still down about 8 per cent for the year.
Futures
The SPI futures are pointing to a 0.4 per cent gain.
Currency
One Australian dollar at 8:10 AM has weakened compared to the US dollar yesterday buying 67.31 US cents (Thu: 67.55 US cents).
Commodities
Iron ore futures are pointing to a 0.3 per cent gain.
Gold down 0.1 per cent. Silver fell 0.3 per cent. Copper dropped 1.9 per cent and oil was up 0.4 per cent.
Figures around the globe
Across the Atlantic, European markets closed higher. London’s FTSE added 0.4 per cent, Frankfurt rose 0.2 per cent while Paris closed 0.7 per cent higher.
In Asian markets, Tokyo’s Nikkei lost 0.1 per cent, Hong Kong’s Hang Seng fell 0.9 per cent while China’s Shanghai Composite closed 0.1 per cent lower.
Yesterday, the Australian sharemarket closed 0.1 per cent higher at 7255.36.
Ex-dividends
Ampol (ASX:ALD) is paying 155 cents fully franked
Argo Global (ASX:ALI) is paying 4 cents fully franked
Ambertech (ASX:AMO) is paying 0.5 cents fully franked
Healthia (ASX:HLA) is paying 2 cents fully franked
Kina Securities (ASX:KSL) is paying 5.525 cents unfranked
Lifestyle Communit (ASX:LIC) is paying 5.5 cents fully franked
Nine Entertainment (ASX:NEC) is paying 6 cents fully franked
Prime Financial (ASX:PFG) is paying 0.7 cents fully franked
Qualitas Re Income (ASX:QRI) is paying 1.006 cents unfranked
Sequoia Financial Group (ASX:SEQ) is paying 0.7 cents fully franked
Shape Australia Corp (ASX:SHA) is paying 5 cents fully franked
Southern Cross Media Group (ASX:SXL) is paying 4.6 cents fully franked
Treasury Wine Estate (ASX:TWE) is paying 18 cents fully franked
Dividends payable
Korvest (ASX:KOV
Hotel Property Investments (ASX:HPI)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Disclaimer
The views, opinions or recommendations of the commentators in this presentation are solely those of the author and do not in any way reflect the views, opinions, recommendations, of Sequoia Financial Group Limited ABN 90 091 744 884 and its related bodies corporate (“SEQ”). SEQ makes no representation or warranty with respect to the accuracy, completeness or currency of the content. Any prices published are accurate subject to the time of filming and shouldn’t be relied upon to make a financial decision. Commentators may hold positions in stocks mentioned and companies may pay FNN to produce the content at times. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian Financial Services Licensee before making investment decisions. To the extent permitted by law, SEQ excludes all liability for any loss or damage arising in any way including by way of negligence.
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Source: Finance News Network
