US earnings giving markets confidence: Nasdaq futures +2% post Netflix results
US equities finished higher in Tuesday trading, with major indices fading off early strength before firming into a choppier afternoon.
The optimism comes after 3Q and 4Q earnings should confirm fundamentals remain anchored in a resilient labour market and Covid reopening. Equity valuations will likely remain tied to global central bank rhetoric and rates, which is turning incrementally less negative.
The Dow Jones Industrial Average gained 1.1 per cent. The S&P 500 and Nasdaq Composite gained 1.1 per cent and 0.9 per cent, respectively.
Earnings from the banking sector continues to help the market find support.
Goldman Sachs rose more than 2 per cent to boost the Dow after strong trading results helped the investment bank beat expectations for earnings and revenue. That report continued a strong stretch of bank earnings, including beats from Bank of America and Bank of New York Mellon on Monday, and the financial sector as a whole outperformed on Tuesday.
Elsewhere, Salesforce rose more than 4 per cent after activist hedge fund Starboard Value LP revealed a stake in the software giant, making the stock the top performer in the Dow.
Netflix shares skyrocketed more than 14 per cent after the bell Tuesday as the company posted better-than-expected results, the streaming company also reported the addition of 2.41 million net global subscribers, more than doubling the number the company had projected a quarter ago.
United Airlines forecast another profit for the end of the year and said consumer appetite for travel is showing no signs of slowing down, despite high airfares. Shares jumped more than 8 per cent in after hours.
Across the sectors, broad based strength was seen across the market. Best performing industries included travel , retail, banking and EV stocks
Of note, on the ASX yesterday, are we starting to see an emerging trend with gold stocks as the strong $A and increased production cost is taking away their margin.
St Barbara shares plunged 21.6 per cent yesterday after the gold miner confessed to a blowout in the cost of production at its first-quarter update. The Perth-based gold producer reported an all-in cost of $2490 an ounce for the quarter, against a realised gold price of $2486. Effectively meaning the company was selling gold at a loss. St Barbara's all-in sustaining cost has surged from $1492 in the first quarter of 2021-22.
It seems like the sector may be losing its safe haven status in volatile markets.
Currencies
One Australian dollar has strengthened compared to the US dollar yesterday, buying 63.10 US cents (Tue: 62.90 US cents), 55.71 Pence Sterling, 94.16 Yen and 64.01 Euro cents.
Commodities
Iron ore futures are pointing to a 0.1 per cent gain.
Gold lost $7.40 or 0.4 per cent to US$1657 an ounce.
Silver fell $0.06 or 0.3 per cent to US$18.66 an ounce.
Copper lost $5.45 or 1.6 per cent to US$336.10 a pound.
Oil lost $2.21 or 2.6 per cent to US$83.25 a barrel.
Futures
The SPI futures are pointing to a 0.4 per cent fall on the ASX today this may be reversed as the NASDAQ futures are currently up 2 per cent post the Netflix results
Figures around the globe
Across the Atlantic, European markets closed higher. Paris added 0.4 per cent, Frankfurt gained 0.9 per cent and London’s FTSE closed 0.2 per cent higher.
In Asian markets, Tokyo’s Nikkei gained 1.4 per cent, Hong Kong’s Hang Seng rose 1.8 per cent and China’s Shanghai Composite lost 0.1 per cent.
Yesterday, the Australian sharemarket gained 1.7 per cent to close at 6779.
Ex-dividends
Spheria Emerging Co (ASX:SEC) is paying 2.1 cents fully franked
Dividends payable
Sims Ltd (ASX:SGM)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Copyright 2022 – Finance News Network
Source: Finance News Network
