Markets up despite rate news: Extreme weather disrupting Chinese supply chain
Stocks rose Thursday after moving between gains and losses as Wall Street weighed Federal Reserve Chair Jerome Powell’s comments. Overnight, ECB raised rates by 75 bp, as largely expected.
In Australia, the ASX bounced yesterday after Reserve Bank governor Philip Lowe hinted that future interest rate rises from the central bank will be smaller and slower in coming. Governor Lowe left markets with the strong impression that a rate rise like Tuesday’s 0.50 per cent might have been the last.
Overnight the Dow Jones Industrial Average jumped 0.61 per cent,. The S&P 500 rose 0.66 per cent and the Nasdaq Composite advanced 0.60 per cent to 11,862.13.
In company news, DocuSign shares surged more than 17 per cent after the electronic agreements company reported an earnings beat, and issued a third-quarter revenue forecast that was above expectations. DocuSign reported earnings of 44 cents per share on revenue of $622 million.
Across the sectors health care & financials outperformed – Biotech rallied for a second day following an upbeat assortment of regulatory headlines and clinical updates.
Best performing industries included Banks, industrial metals, biotech, med tech, semis, credit cards, were among the outperformers. Media, big tech and food lagged.
Chinese factories were shuttered again in late August, a frequent occurrence in a country that has imposed intermittent lockdowns to fight the coronavirus. But this time, the culprit was extreme weather, exacerbated by climate change. A record drought crippled economic activity across the southwest, freezing international supply chains for automobiles, electronics and other goods that have been routinely disrupted over the past three years.
The interruptions could be a sign of the toll that climate change will most likely continue to wreak on the global economy. Many major companies source parts and products from places routinely affected by worsening extreme weather. Academics say the effect of these disasters, and of higher temperatures in general, will be particularly obvious when it comes to food trade. "What we just went through with Covid is a window to what climate could do,” one expert said.
Currencies
One Australian dollar has weakened compared to the US dollar yesterday, buying 67.54 US cents (Thu: 67.69 US cents), 58.72 Pence Sterling, 97.33 Yen and 67.53 Euro cents.
Commodities
Iron ore futures are pointing to a 2 per cent gain.
Gold lost $7.60 or 0.4 per cent to US$1720 an ounce.
Silver was up $0.18 or 1 per cent to US$18.44 an ounce.
Copper gained $9.65 or 2.8 per cent to US$352.70 a pound.
Oil was up almost 2 per cent after dropping to a seven-month low in the prior session
Futures
The SPI futures are flat.
Figures around the globe
Across the Atlantic, European markets closed mixed. Paris gained 0.3 per cent, Frankfurt lost 0.1 per cent and London’s FTSE closed 0.3 per cent higher.
Asian markets closed mixed. Tokyo’s Nikkei gained 2.3 per cent, Hong Kong’s Hang Seng fell 1 per cent and China’s Shanghai Composite closed 0.3 per cent lower.
Yesterday, the Australian sharemarket gained 1.8 per cent to 6849.
Ex-dividends
There are seven companies set to trade without the right to a dividend.
Argo Global Listed Infrastructure (ASX:ALI) is paying 4.5 cents fully franked
Ambertech (ASX:AMO) is paying 1.5 cents fully franked
Generation Development Group (ASX:GDG) is paying 1 cent fully franked
Nine Entertainment (ASX:NEC) is paying 7 cents fully franked
National Tyre & Wheel (ASX:NTD) is paying 1.5 cents fully franked
Sequoia Financial Group (ASX:SEQ) is paying 0.9 cents fully franked
Wisetech Global (ASX:WTC) is paying 6.4 cents fully franked
Dividends payable
There are seven companies set to pay eligible shareholders today.
AngloGold Ashanti (ASX:AGG)
Australian United Investment Company (ASX:AUI)
Baby Bunting Group (ASX:BBN)
Diversified United Investment (ASX:DUI)
Finbar Group (ASX:FRI)
JB Hi-Fi (ASX:JBH)
Steadfast Group (ASX:SDF)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Copyright 2022 – Finance News Network
Source: Finance News Network
