Dow hits new high amid investor anticipation for inflation and earnings data

The Dow Jones Industrial Average rose to a new high on Monday as investors awaited fresh inflation and earnings data.

The 30-stock index advanced 125.69 points, or 0.32 per cent, to settle at 38,797.38. The S&P 500 inched lower by 0.09 per cent to end at 5,021.84, while the Nasdaq Composite slid 0.3 per cent to close at 15,942.55.

Salesforce dragged the Dow lower, with the cloud-based software stock sliding 1.4 per cent. Shares of Hershey slipped less than 1 per cent following a downgrade to underweight from Morgan Stanley on the back of softer demand.

On the other hand, Diamondback Energy rose 9.4 per cent after announcing that it would acquire oil and gas producer Endeavor Energy Partners in a 26bn deal. The cash and stock transaction, announced on Monday, will transform Midland, Texas-based Diamondback into one of the biggest participants in the sprawling Permian Basin of Texas and New Mexico, the biggest US oilfield. Diamondback, which was valued at $27bn before the deal was announced, had been vying for weeks with the much larger Conoco to buy the shale oil producer.

Some 61 names in the S&P 500 are set to report earnings in the week ahead, including gig economy stocks Lyft, Instacart and DoorDash. Companies such as AutoNatio, Kraft Heinz, Hasbro and Coca-Cola will also shed light on the state of the U.S. consumer.

Traders will also watch out for the latest level on the consumer price index — or CPI, a key inflationary gauge — set to be released on Tuesday morning. More key economic data is expected on Thursday and Friday, including January’s reading on retail sales, production, imports and exports, housing starts and the producer price index, or PPI.

Still, the market’s rally over the last three months has been unusually strong and consistent, raising the possibility a pullback could occur soon. The S&P 500 has now gone over 70 trading days without experiencing a 2 per cent decline, according to Bespoke Investment Group.

In biotech-related news, biotech companies in the US are rapidly raising funds in equity markets, reaching levels not seen since the peak of the mid-pandemic market boom, with drug developers raising $6.2bn in January, the highest total since February 2021, reflecting a significant shift in investor sentiment and marking a sharp turnaround from a two-year deal drought that led to job cuts, project shelving, and business closures.

Turning to commodities, US Assistant Secretary of State Brian A. Nichols and the Argentine Chamber of Mining Companies (CAEM) discussed mining industry developments and potential cooperation on critical minerals, notably amidst the absence of a free trade agreement (FTA) between the two countries. Argentina, the world's fourth-largest lithium producer after Australia, Chile, and China, holds significance in light of recent regulations allowing the US to utilise battery components from non-FTA nations.

Overall, US sectors were mixed overnight. Utilities was the best performer, whilst Tech was the worst.

Bitcoin surpassed the $50,000 mark for the first time in over two years, reaching $50,334.00, its highest level since December 2021, and Ether also rose, hitting $2,638.62.

Futures

The SPI futures are pointing to a 0.3 per cent gain.

Currency

One Australian dollar at 8.25am was buying 65.31 US cents.

Figures around the globe

European markets closed higher. London’s FTSE added 0.01 per cent, Frankfurt gained 0.65 per cent, and Paris closed 0.55 per cent higher.

Yesterday, the Australian share market closed 0.39 per cent lower at 7,614.92.

Ex-dividends
Qv Equities (ASX:QVE) is paying 1.3 cents fully franked

Dividends payable
Transurban Group (ASX:TCL)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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