US stocks rally on better than expected consumer confidence data

 

Stocks jumped Wednesday, rising for a second day, after upbeat earnings reports from two bellwethers raised hopes that corporate earnings may be better than feared even with a potential recession.
The gains came as stability returned to most government bond markets, which on Tuesday were rocked by the BoJ’s announcement that it would allow 10-year Japanese yields to climb as high as 0.5 per cent, compared with 0.25 per cent previously.

Better-than-expected consumer confidence data for December also boosted investor sentiment in the markets, jumping to its highest level since April.

The Dow Jones Industrial Average gained 1.6 per cent. The S&P 500 surged 1.49 per cent, while the Nasdaq Composite jumped 1.54 per cent.

Nike surged 13 per cent after beating Wall Street’s expectations for quarterly earnings and revenue. The results lifted other retail stocks. The sports apparel maker also showed progress in its attempt to clear through inventory, posting a decline over the previous quarter.

Meanwhile, FedEx gained 5 per cent after reporting earnings per share that beat estimates. The company also shared a slew of cost-cutting plans.

With the end of 2022 in sight, all three major averages are on pace to snap a 3-year win streak and post their worst year since 2008. The Dow’s down 8.2 per cent for the year and 3.6 per cent this month, while the S&P’s shed 18.6 per cent and 5 per cent, respectively. The Nasdaq’s plummeted 31.5 per cent in 2022 and 6.6 per cent in December.

It's been media stocks that have been some of the worst performers this year. The Dow Jones Media Titans index, which tracks the performance of 30 of the world’s biggest media companies, has shed 40 per cent this year, with more than $500bn wiped off the market value of the world’s biggest media companies this year as investors soured on the streaming revolution, triggering historic share price declines for broadcasting and entertainment groups. 

Intensifying competition and rising costs have combined with consumer belt tightening and an advertising slowdown to spark an industry-wide decline. Media, which for investors spans a broad range of activities from film production to advertising to cable television, has been among the hardest-hit sectors in what is set to be the worst year for global equities since the financial crisis.

Across the sectors – The S&P 500 tech sector jumped 1.7 per cent to lead a broad market rally – AMD, Broadcom and Apple were the best performers in the sector, rising more than 3 per cent each. Consumer discretionary and financials also gained 1.5 per cent, while the other S&P 500 sectors closed at least 0.8 per cent higher. Best performing thematics included live streaming, and online education.

Futures

The SPI futures are pointing to a 0.6 per cent gain.

Currency

One Australian dollar at 8:10 AM has strengthened compared to the US dollar yesterday buying 67.07 US cents (Wed: 66.78 US cents).

Commodities

Iron ore futures are pointing to a 1.8 per cent gain. Iron ore is 3.4 per cent higher at US$114.25 tonne.

Gold shed 0.1 per cent. Silver lost 0.3 per cent. Copper added 0.5 per cent and oil gained almost 3 per cent.

Figures around the globe

Across the Atlantic, European markets closed higher. Paris jumped over 2 per cent, Frankfurt gained 1.5 per cent and London’s FTSE closed 1.7 per cent higher.

In Asian markets, Tokyo’s Nikkei lost 0.7 per cent, Hong Kong’s Hang Seng added 0.3 per cent and China’s Shanghai Composite closed 0.2 per cent lower.

Yesterday, the Australian sharemarket added 1.3 per cent to close at 7115.

Dividends payable

Orica (ASX:ORI)
GQG Partners Inc (ASX:GQG)

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

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