Note: Figures recorded at 7:30am AEDT. Updated figures and a video recording will be available at 9am AEDT.
Tech companies, led by Apple, powered the market Thursday and pulled the major averages into positive territory.
Apple shares ticked higher by 3.4% after Bank of America upgraded the stock to buy, calling for more than 20% upside over the next 12 months. This put the tech giant on pace for its best day since May 5, 2023. The Technology Select Sector SPDR Fund (XLK) also popped 1.9%, reaching an all-time high.
Taiwan Semiconductor Manufacturing Co, the world’s largest chipmaker, added more than 8% after posting an earnings and revenue beat for the fourth quarter. This helped push the VanEck Semiconductor ETF (SMH) up more than 3% to reach an all-time high.
Tech stocks have received a significant lift due to the positive TSMC update, which provided an optimistic outlook for both semiconductor and artificial intelligence sectors. This update has had a notable impact on the trading activity of many tech companies, as their performance is closely tied to these areas. The price movements clearly reflect this trend.
As a result, Tech is the top performer out of the S&P500 sectors. Utilities is currently last.
The Dow Jones Industrial Average added 137 points, or 0.4%, rebounding from its 143 point loss earlier in the trading session. The tech-heavy Nasdaq jumped 1.3%, turning it positive around 0.2% for the year. The S&P 500 climbed 0.7%.
The 10-year Treasury yield hovered the 4.15% level on Thursday as fresh jobs data indicated ongoing tightness in the labour market. First-time filings for unemployment insurance came in at 187,000 for the week ended Jan. 13, down 16,000 from the previous period, the Labor Department reported Thursday. That was stronger than economists’ consensus estimate of 208,000, according to numbers gathered by Dow Jones.
Investors are concerned that a buoyant labour market coupled with robust consumer spending, reflected in Wednesday’s retail sales report for December, may mean fewer rate cuts from the Federal Reserve than many are expecting. Currently, markets are pricing in a roughly 56% chance of a quarter percentage point rate cut in March, according to the CME FedWatch Tool.
Experts are expecting the central bank to start reducing rates in the third quarter. While that’s sooner than Bostic previously had expected, it also puts the Fed on a slower cutting pace than the market is anticipating.
In commodity-related news, the International Energy Agency (IEA) predicts that in 2024, the global oil supply is expected to rise to 103.5 million barrels per day, primarily driven by increases in production from the Americas, while OPEC+ supply is expected to remain steady with gradual phasing out of voluntary cuts. However, global oil demand growth is projected to slow down significantly from 2.3 million barrels per day in 2023 to 1.2 million barrels per day in 2024 due to various factors including macroeconomic challenges, stricter efficiency standards, and the expansion of electric vehicle fleets.
Currency
One Australian dollar at 7.30am was buying 65.66 US cents.
Figures around the globe
European markets closed higher. London’s FTSE added 0.17 per cent, Frankfurt gained 0.83 per cent, and Paris closed 1.13 per cent higher.
Turning to Asian markets, Tokyo’s Nikkei lost 0.03 per cent, Hong Kong’s Hang Seng added 0.75 per cent and China’s Shanghai Composite closed 0.43 per cent higher.
The Australian share market closed 0.63 per cent lower at 7,346.48.
Ex-dividends
Kelly Partners Group (ASX:KPG) is paying 0.4392 cents fully franked
Dividends payable
Charter Hall Social Infrastructure REIT (ASX:CQE)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
