ASX Futures (SPI 200) imply the ASX will open 50 points higher, up 0.68%.
Wall Street rallied sharply thanks to better-than-expected earnings from Facebook-parent Meta, Apple and Amazon released underwhelming results after hours, US GDP unexpectedly declined in the March quarter and China will remove coal import tariffs to improve supply.
Let’s dive in.
Fri 29 Apr 22, 8:32am (AEST)
|US 10 Yr T-bond||2.863||+1.60%|
Major US averages finished sharply higher as a 17.5% jump in Meta shares brought investors back into tech stocks
The major averages are around breakeven for the week, but for the month of April:
Dow Jones -2.2%
S&P 500 -5.4%
All 11 US sectors were green
Tech and energy outperformed
71% of US stocks advanced
67% of US stocks trade below their 200-day moving average (69% on Thursday, 61% a week ago)
Meta (+17.6%) released earnings after hours on Thursday. Daily active users, which declined in the December quarter for the first time, bounced back from 1.93bn to 1.96bn. EPS and average revenue per user exceeded expectations
PayPal (+11.5%) after downgrading its full-year outlook and revoked its medium-term forecast. The company now expects revenue growth between 11-13% in 2022
McDonalds (+2.9%) beat first-quarter earnings and revenue expectations thanks to higher prices in the US and strong international sales growth
Amazon (-10% after hours) after first-quarter growth rates came in at the slowest pace since the dot-com bust in 2001. Revenue rose just 7% compared to 44% a year ago
Apple (-4% after hours) after CFO Luca Maestri warned of several challenges in the current quarter. Though, the company topped consensus expectations across all key financial metrics, declared a US$90bn share buyback and a 5% dividend
The upcoming session will be very interesting given the after hour declines from heavyweights Amazon and Apple
US earnings to watch this week:
Fri: ExxonMobil, AstraZeneca, Shevron
US GDP unexpectedly declined -1.4% in the March quarter, well below consensus expectations of a 1.1% expansion. The main drags on growth include:
Rising omicron infections at the start of the year
The Russian invasion of Ukraine
Deceleration of private investment, which helped boost GDP growth in the second-half of 2021
-8.5% pullback in defence spending
A massive -US$89.2bn trade deficit in February as imports greatly outweighed exports
Iron ore prices remain unchanged at US$150. Transport has improved in regions recently affected by movement restrictions and some steel mills have been able to restock existing inventory ahead of China’s Labour Day long weekend, according to Fastmarkets
Oil prices continue to recover from lows earlier this week that sent prices below US$100 a barrel
Gold is trying to stabilise after hitting a recent low of US$1,870, weighed by a strong US dollar
Friday, 29 April 2022
Friday, 29 April 2022
|Lithium & Battery Tech||64.33||+1.17%|
|Aerospace & Defense||105.3||+0.54%|
|Robotics & AI||23.71||+2.70%|
So you're telling me, the stock market rallies on news that GDP contracted instead of showing economic growth. What a time to be alive.
Besides tech, most ETFs were up or down less than 1% overnight including copper mines, uranium, gold and lithium/rare earths.
The Nasdaq was due for a bounce, further exacerbated by the better-than-expected earnings from Meta. However, with Apple and Amazon both down in after hours, the upcoming session could be very choppy.
Nevertheless, Meta's strong showing helped lift the Global X Fintech, Cloud and eCommerce ETFs between 2-4%. Though, these gains are inconsequential in the bigger picture, as these ETFs are all down around -30% year-to-date.
Local tech stocks will likely take the overnight session at face value and try to push higher in the morning. A 4.7% rally for Block will mean a strong open for local Block (ASX: SQ2) shares.
It will be interesting to see if tech gains fade into the afternoon as the market digests Apple and Amazon's mixed after hours earnings.
Oil prices continue to consolidate, with the range tightening and potentially setting up for a breakout (or breakdown).
"The same factors remain at play here and could be the catalyst for an eventual breakout, be it further Chinese lockdowns, slow output growth from OPEC+, new supply disruptions, larger reserve releases etc. Or, of course, an escalation in tensions between Russia and the West, leading to an immediate embargo," said Oanda senior market analyst, Craig Erlam.
"The Kremlin has taken us down that path in the natural gas space, imposing rouble demands on buyers that have led to Poland and Bulgaria being cut off. The stand-off could spill over into oil markets."
Travel is one of few sectors that have held up relatively well amid the market's recent selloff.
The US Global Jets ETF was up 2% overnight and retesting the 200-day moving average.
Southwest Airlines delivering a wide-than-expected first quarter loss but managed to double revenues. The company said it was experiencing a "sharp rebound" in March.
ASX corporate actions occurring today:
Ex-dividend: MOT, MXT, PGG
Dividends paid: BIS, CWP, D2O, FGX, KPG, LSX, MNY, PGF, PIC, PL8, REP, RFF, RIC, WLE, YAL
Issued shares: 360, MGF, MMA, MRI, PGO, PNL
Things of interest (AEST):
EU GDP Growth Rate (March Quarter) at 7:00 pm
Finance Writer & Social Media
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