Markets surge in debt ceiling resolution: US business leaders push into China

The ASX looks like starting with gusto later this morning after a big end to the week on Wall Street on Friday.

The Dow Jones Industrial Average surged Friday for its best day since January as traders cheered a strong jobs report and the passage of a debt ceiling bill that averts a US default.

Easing concerns around the US debt ceiling also helped sentiment. The Senate passed a bill to raise the debt ceiling late Thursday night, sending the bill to President Joe Biden’s desk. That comes after the House passed the Fiscal Responsibility Act on Wednesday, just days before the June 5 deadline set by US Treasury Secretary Janet Yellen.

The 30-stock Dow jumped 701.19 points, or 2.12 per cent, to end at 33,762.76. The S&P 500 climbed 1.45 per cent to close at 4,282.37. The Nasdaq Composite advanced 1.07 per cent to 13,240.77, reaching its highest level since April 2022 during the session.

With Friday’s gains, the S&P 500 and Nasdaq finished the holiday-shortened trading week about 1.8 per cent and 2 per cent higher, respectively. The Dow’s Friday advance pushed it into positive territory for the week, finishing up 2 per cent. The Nasdaq notched its sixth straight week higher, a streak length not seen for the technology-heavy index since 2020.

Nonfarm payrolls grew much more than expected in May, rising 339,000. Economists polled by Dow Jones expected a relatively modest 190,000 increase. It marked the 29th straight month of positive job growth.

Recently, strong employment data had been pressuring stocks on the notion it would keep the Federal Reserve raising interest rates. But Friday’s data also showed average hourly earnings rose less than economists expected year over year, while the unemployment rate was higher than anticipated.

The return of corporate leaders to China is putting the country back on the “radar” of the business world, The VIP reception for Musk, JP Morgans Jamie Dimon and others such as Apple’s Tim Cook, echoed an earlier period of US-China relations when Beijing wooed American chief executives in an effort to influence policy in Washington.

In just two days this week, Elon Musk had more top-level Chinese meetings than most Biden administration officials have had in months. It seems like business leaders are trying to mend Chinese business relationships.

Futures

The SPI futures are pointing to a 1.1 per cent gain.

Currency

One Australian dollar at 7:10 AM is buying 66.08 US cents.

Commodities

Iron ore futures are pointing to a 2.08 per cent gain.

Gold lost 1.30 per cent. Silver fell 1.00 per cent. Copper added 0.44 per cent and oil gained 2.34 per cent.

Figures around the globe

Across the Atlantic, European markets closed higher. London’s FTSE added 1.56 per cent, Frankfurt gained 1.25 per cent while Paris closed 1.87 per cent higher.

In Asian markets, Tokyo’s Nikkei added 1.21 per cent, Hong Kong’s Hang Seng gained 4.02 per cent while China’s Shanghai Composite closed 0.79 per cent higher.

Yesterday, the Australian sharemarket closed 0.48 per cent higher at 7145.

Ex-dividends

Morphic Ethical Equities Fund (ASX:MEC) is paying 1.5 cents fully franked
Qualitas Re Income (ASX:QRI) is paying 1.1414 cents unfranked

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.
Copyright 2023 – Finance News Network