Morning wrap: Tesla boosts Nasdaq, Apple hits $3tn valuation, ASX to open flat

ASX Futures (SPI 200) imply the ASX will open flat.

US stocks edged higher overnight, kicking off the first trading day of 2022 on a more encouraging note. Among stocks on the move, Apple shares became the first company ever to hit a $3 trillion valuation while Tesla shares jumped 13% after exceeding fourth quarter vehicle deliveries.  

The Dow Jones scored a record close while the S&P 500 was a fraction away from setting another all-time high. 

The tech-heavy Nasdaq outperformed but remained 1.8% away from all-time highs.

Stocks have the tendency to rise at the start of the year, with the S&P 500 up in the first week of the calendar year in 11 of the last 13 years, according to Bank of America. 

Still, there is a great deal of uncertainty around the covid-19 pandemic, whereby cases globally are surging to record highs. That said, the fast spread of the omicron variant has not led to a major increase in hospitalisations. 

The US Government’s top medical adviser, Dr Anthony Fauci told CNN’s State of the Union that “you have a virus that looks like it might be less severe, at least from data we’ve gathered from South Africa, the UK and even some preliminary data from the US.”

“It’s a very interesting, somewhat complicated issue … so many people are getting infected that the net amount, the total amount of people that will require hospitalisation, might be up. We can’t be complacent in these reports. We’re still going to get a lot of hospitalisations.”

Despite two major US indices closing around all-time highs, more than half the 11 major sectors closed in negative territory. 

Material stocks fell the most, but as far as Australian investors are concerned, US-listed counterparts of BHP Group (ASX: BHP) and Rio Tinto (ASX: RIO) closed -0.02% and -0.6% lower respectively. 

The performance of healthcare stocks was weighed by a subdued investor appetite for vaccine makers, with Moderna, BioNTech and Pfizer stock falling -7.6%, -3.9% and -9.6% respectively. Most non-vaccine, large cap healthcare stocks closed around flat for the overnight session. 

Energy stocks topped the leaderboards as investors shrugged off concerns about omicron and holiday flight cancellations. 

This attitude was also reflected across consumer discretionary stocks as reopening plays closed sharply higher. American, Delta and United Airlines added more than 3%. Norwegian Cruise Line and Carnival Corp both closed 6% higher. 

Bond yields jumped higher with the 10-year Treasury yield up 8.2% to 1.64%. This helped drive solid gains across financials including Wells Fargo (5.7%), Citi (4.5%) and Bank of America (3.8%).

ASX Sectors in play

ETF GAINERS

The Uranium ETF bounced off its 200-day moving average, closing sharply higher after a challenging past two months.

ASX-listed uranium stocks moved ahead of the ETF, with names like Paladin Energy (ASX: PDN), Boss Energy (ASX: BOE), Peninsula Energy (ASX: PEN) and Lotus Resources (ASX: LOT) all closing at least 5% higher on Friday, 31 December 2021. 

• ASX uranium stocks have taken charge instead of reacting to how the ETF and overnight uranium stocks move 

• This makes it difficult to gauge how they will perform in today’s trading session 

• It is however, encouraging to see the Uranium ETF bounce off its 200-day moving average after almost falling 30% between 9 November and 30 December

The Jets ETF closed at a 5-week high as investors shrugged off omicron-related concerns. The ETF has bounced off mid-$19s on two separate occasions, making the case for a double bottom. It could face some resistance moving into pre-omicron price levels and also the 200-day moving average.

• Nevertheless, the positive overnight session could help ASX travel and reopening stocks like Corporate Travel (ASX: CTD), Flight Centre (ASX: FLT) and Qantas (ASX: QAN) 

ETF LOSERS

Gold prices fell 1.5% to US$1801.7/oz overnight, driving a likewise decline for the ETF.  

• Gold has struggled to rally and hold above US$1,800/oz in the past 12-months 

• Large cap ASX names like Northern Star Resources (ASX: NST), Newcrest Mining (ASX: NCM) and Evolution Mining (ASX: EVN) have struggled to outperform the ASX 200 amid choppy gold prices 

• The overnight decline could flag more choppy action for local gold miners

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