Morning report

Paint the Town Green

All indices moved into positive territory over the session. US and European markets rode tech earnings results to move sharply higher. Asia continues upwards slope after further aid was announced in the previous session.

US markets take advantage of big name tech brands

The US markets felt Nvidia’s sharp increase as all major indices moved up. In economic news, unemployment claims fell to 201,000 last week, down 12,000 from the previous. The US 2-year treasury bond yield added +6 bp to 4.71%, while the 10-year increased +1 bp to 4.33%. The three major indices all moved higher, the tech-heavy Nasdaq leapt +2.6%, the S&P 500 advanced +1.8%, while the Dow increased +0.8%. Nvidia’s three-fold surge in 1Q24 revenue increased the stock by +14.7%, alongside benefitting Advanced Micro Devices (+11.3%) and Super Micro Computer (+29.1%), in an all-out tech rally. In other industries, Moderna soared +12.8% after it posted surprising 4Q profit due to cost-cutting and deferred payments. Rivian plummeted -25.8% alongside Lucid’s -17.7% as the EV startups forecast production well below estimates due to falling demand.

European markets improve outlook after PMI and earnings results

European markets cheered PMI data; services PMI was up to 50.0 from 48.4 and manufacturing PMI fell to 46.1 from 46.4 m-o-m. Positive sentiment also likely came from NVIDIA’s earnings results, setting a broad standard for the AI-fueled tech rally. Europe’s Stoxx 600 added +0.8%. Infineon (+2.2%) and ASM International (+2.8%) were boosted by Nvidia’s strong revenue forecasts. BESI Semiconductor jumped +4.9% after it exceeded 4Q targets producing AI-related chipmaking parts. Nestle cut -4.9% as it missed FY23 sales estimates. London’s FTSE 100 pushed +0.3% upward. Rolls-Royce soared +8.3% after the engineering firm forecast better performance in 2024, its annual profit more than doubled last year. Anglo American increased +3.2% as the miner said it would buy the Serpentina project with its mine in Brazil. ​​​​​​​

Australasian markets up on optimism

All Asian indices moved up, with Japan’s Nikkei 225 (+2.2%) leading the charge, followed closely by Hong Kong’s Hang Seng (+1.5%). China’s Shanghai Composite added +1.3%, with its CSI 300 counterpart increasing just 0.9%. Korea’s Kospi inched +0.4% higher. Australia’s ASX 200 kept flat at +0.0% over the session. Fortescue increased +2.1% after the iron miner posted 1H24 earnings and dividends above consensus estimates. Rio Tinto lost -1.1% after three investment banks lowered target prices. Aristocrat Leisure slid -1.9% after it warned shareholders of an environment of elevated economic uncertainty. Qantas Airways dropped -6.8% despite 1H24 profit ahead of market expectations and a AU$400 million share buyback. IGO added +3.7% as the miner’s 1H24 results met market expectations. Medibank dropped -5.4% as the insurer missed 1H24 forecasts. Super Retail cut -6.0% after it warned of slowing sales late in 1H24 that continued into the first few weeks of the second half. Lovisa soared +10.4% after it reported double-digit revenue increases and net profit in 1H24. In New Zealand, the NZX 50 added +0.9%.

WTI Crude up, Gold down, Iron Ore down

WTI Crude advanced +1.2% to US$78.88/bbl, Gold fell -0.1% to US$2,022.41/oz, Iron Ore dropped -0.4% to US$127.30/MT.


 

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This morning summary has been provided by Forsyth Barr Ltd and is for general information purposes only - your financial situation or goals have not been taken into account. If you would like more information or advice that is specific to you, talk to your financial adviser.