Bear market bounce, as Musk revives his bid for Twitter
Stocks surged Tuesday as Wall Street built on a sharp rally seen in the previous session as bond yields continued to fall.
The Dow Jones Industrial Average rose 2.8 per cent. The S&P 500 added 3.1 per cent, and the Nasdaq Composite was up 3.3 per cent.
All of the major averages are now each about 5 per cent above their lows of the year. Tuesday’s gains also put the S&P 500 up 5.3 per cent for the week and is on track for its biggest two-day rally since March 2020.
Markets have had a strong start to the month, bringing a respite from the swift declines seen in September and the prior quarter.
The argument is that the S&P 500 looks oversold after falling more than 9 per cent in September and extending its year-to-date decline to nearly 25 per cent as of Friday’s close. In addition, some of last week’s selling pressure may have been driven by quarter-end rebalancing, which has now ended.
Sentiment has improved these past two sessions as Treasury yields come off more-than 10-year highs. The rally was broad based with 97 per cent of the S&P 500 up for the third time in 5 days.
Sentiment on Tuesday also got a boost as shares of Credit Suisse traded 4 per cent higher. Earlier in the week there were concerns regarding the bank’s financial health. The bank told CNBC it would provide updates to its strategy alongside its third-quarter numbers.
Stocks extended their advance following job openings data pointing to a weakening in the labor market, leading some traders to bet the Fed could back off its aggressive tightening campaign sooner than expected.
Across the sectors energy was the star performer as the oil price rallied 3 per cent. Within the sectors best performing industries included social media, EV battery, gaming, investment banks and oil and gas stocks .
In company news, Elon Musk has revived his bid for Twitter Inc. at the original offer price of $54.20 a share, potentially avoiding a courtroom fight over one of the most contentious acquisitions in recent history. The stocks closed up 22 per cent as a result.
In tech news, the White House will restrict Chinese tech firms’ access to some chips. In the coming days, the Biden Administration is expected to announce new measures that would limit the ability of A.I. and supercomputing firms in China to access American high-tech equipment and software.
On the economic front, a rush to secure natural gas is resulting in an acute shortage of seaborne vessels, forcing companies to pay record-high rates to transport the fuel to Europe. "Atlantic LNG freight rates have increased over 300 per cent in one month as participants look to secure the last remaining vessels ahead.
Iron ore is managing to steer a fairly straight course despite the headwinds and crosswinds being thrown about by both the Chinese and global economies. The spot price's stability has persisted in recent weeks despite perceptions that the state of the Chinese economy have shifted, varying from optimism amid expected stimulus measures from Beijing to pessimism over a problematic construction sector.
Currencies
The dollar index was down 1.4 per cent, dropping for the fifth consecutive session. Sterling had a good day.
One Australian dollar at 7:25 AM buying 65.06 US cents
Commodities
Gold prices rose over 1 per cent to a three-week high Gold jumped $31.60 or 1.9 per cent to US$1734 an ounce.
Silver gained $0.51 or 2.5 per cent to US$21.10 an ounce.
Copper rose $8.65 or 2.5 per cent to US$349.65 a pound.
Oil jumped $2.64 or 3.2 per cent to US$86.27 a barrel.
Futures
The SPI futures are pointing to a 1.6 per cent gain.
Figures around the globe
Across the Atlantic, European markets closed higher. Paris added 4.2 per cent, Frankfurt gained 3.8 per cent while London’s FTSE closed 2.6 per cent higher.
In Asian markets, Tokyo’s Nikkei gained 2.9 per cent while Hong Kong’s Hang Seng and China’s Shanghai Composite were closed.
Yesterday, the Australian sharemarket gained 3.8 per cent to close at 6699.
Ex-dividends
Clime Capital (ASX:CAM) is paying 1.28 cents fully franked
Naos Emerging Opportunities Company (ASX:NCC) is paying 3.75 cents 50 per cent franked
Ridley Corporation (ASX:RIC) is paying 4 cents fully franked
Ten Sixty Four (ASX:X64) is paying 5 cents unfranked
Dividends payable
Adbri (ASX:ABC)
Corporate Travel Management (ASX:CTD)
CSL (ASX:CSL)
Duratec (ASX:DUR)
Fenix Resources (ASX:FEX)
Inghams Group (ASX:ING)
Integral Diagnostics (ASX:IDX)
Kelsian Group (ASX:KLS)
Service Stream (ASX:SSM)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Copyright 2022 – Finance News Network
Source: Finance News Network
