Dow Jones surges on Salesforce earnings and lower inflation

The Dow Jones Industrial Average rallied Thursday to a new high for the year, as more cooling inflation data and strong Salesforce earnings capped the benchmark’s best month since October 2022.

The 30-stock Dow gained 520 points, or 1.47 per cent, to 35,950.89, surpassing its previous high for the year in August. The S&P 500 added 0.4 per cent to 4,567.80 and the Nasdaq Composite was about 0.2 per cent lower to 14,226.22 as investors took some profits in Big Tech stocks that have led the November comeback.

The Dow is closing out November with an 8.9 per cent gain, breaking its three-month losing streak. The S&P 500 rose 8.9 per cent in November, while the Nasdaq advanced 10.7 per cent. Both averages had their best monthly performance since July 2022. The S&P 500 and Nasdaq Composite were trading about 1 per cent away from their respective 2023 highs.

Leading the Dow higher on Thursday is cloud software company Salesforce, which popped 9.4 per cent on the back of better-than-expected earnings and revenue for the fiscal third quarter. Salesforce’s cloud data business, which saw its revenue increase by 22 per cent from the previous year, and its artificial intelligence product Einstein GPT were behind the positive report. Healthcare companies UnitedHealth Group, Johnson & Johnson, Merck and Amgen also led the index higher.

Data released early Thursday showed that the personal consumption expenditures price index—the Federal Reserve’s favourite inflation gauge—rose 3.5 per cent on a year-over-year basis, a slowing from a 3.7 per cent annual gain in prior month.

These numbers were the latest in a string of positive inflation data seen in November that caused traders to conclude the Federal Reserve is likely done raising rates and could even begin lowering them in 2024.

The 10-year Treasury yield, which had spooked investors by rising above 5 per cent last month, collapsed this month as the cooling inflation data rolled out, helping to boost sentiment for equities. The 10-year yield was recently more than 9 basis points higher at 4.363 per cent.

Nvidia shed 2.9 per cent on Thursday, but is still up 14.7 per cent for the month. Tesla shares were off by 1.7 per cent Thursday following a roughly 19.5 per cent comeback in November. Alphabet and Meta lost 1.8 per cent and 1.5 per cent during the day, respectively.

Turning to US sectors, most closed higher overnight. Communication Services was the worst performer.

Futures

The SPI futures are pointing to a 0.13 per cent fall.

Currency

One Australian dollar at 8:25 AM was buying 66.09 US cents.

Commodities

Gold has lost 0.54 per cent. Silver has gained 0.99 per cent. Copper has gained 0.75 per cent. Oil has lost 2.94 per cent.

Figures around the globe

European markets closed higher. London’s FTSE gained 0.41 per cent, Frankfurt gained 0.30 per cent, and Paris closed 0.59 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei added 0.5 per cent, Hong Kong’s Hang Seng gained 0.29 per cent while China’s Shanghai Composite closed 0.26 per cent higher.

The Australian share market closed 0.74 per cent higher at 7087.33.

Dividends

NB Global Corporate Income Trust (ASX:NBI) is paying 1.22 cents unfranked.

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

Disclaimer

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