ASX to rise, S&P 500 gets further tech sector boost
Brief
- ASX to rise, S&P 500 gets further tech sector boost.
- Australian shares were poised to open higher. Real estate and tech stocks paced gains in the S&P 500. Morgan Stanley downgraded Charles Schwab, citing shift in deposits, renewing concerns about US regional banks.
- ASX futures were up 38 points or 0.53% to 7178 near 7.30am AEDT.
ASX to rise, S&P 500 gets further tech sector boost
Australia: At around 7:30 am AEDT, ASX futures indicated a positive opening for Australian shares, with a 0.53% increase or 38 points to reach 7178. This was in line with the gains seen in Wall Street, where the Dow, S&P, and Nasdaq rose by 0.4%, 0.6%, and 0.7%, respectively.
Real estate, information technology, and communication services were the strongest performers among the S&P 500 industry sectors, while financials underperformed. The NYSE Fang + Index also saw a gain of 1.4%.
However, Morgan Stanley’s downgrade of Charles Schwab due to a shift in deposits renewed concerns about US regional banks. This contrasted with the positive performance of other major companies such as BHP, Rio, Atlassian, Tesla, Apple, and Amazon.
The Australian dollar gained 0.4% to rise above US67¢, while the Bloomberg dollar spot index decreased by 0.4%. In the cryptocurrency market, bitcoin on bitstamp.net saw a 0.8% decline to $US28,146 at 7:40am AEDT.
At 4:59pm in New York, the yield on the US 10-year note decreased by 2 basis points to reach 3.55%.
Jim Bianco, in a series of tweets, challenged the belief that the banking crisis is over, pointing out that bank stocks are not rallying and the majority of stocks in the S&P 500 are down for the year. Only eight stocks are keeping the YTD gains in the S&P 500 positive.
Meanwhile, the average bonus paid to a Wall Street banker fell by 26% to pre-pandemic levels, according to New York state’s comptroller.
Morgan Stanley analyst Michael Cyprys reported that Charles Schwab’s clients are withdrawing cash from the firm’s low-interest-rate bank accounts at twice the expected rate, leading to a 30% reduction in profit forecast for this year and next. Cyprys also downgraded Schwab’s buy-equivalent rating for the first time in seven years.
Federal Reserve Bank of Boston President Susan Collins emphasized the need for more interest-rate increases to bring down inflation and stated that the US banking system is sound.
Federal Reserve Bank of Minneapolis President Neel Kashkari expressed confidence in the banking system, but cautioned that it may take longer than expected to fully understand the impact of the collapse of Silicon Valley Bank. Drawing from his experience during the 2008-2009 financial crisis, Kashkari noted that banking stresses tend to take longer than anticipated, but added that he does not anticipate a similar situation to unfold now.
Market highlights
ASX futures up 38 points or 0.53% to 7178 near 7.30am AEDT
- AUD +0.4% to 67.11 US cents
- Bitcoin -0.8% to $US28,153 at 7.40am AEDT
- On Wall St: Dow +0.4% S&P +0.6% Nasdaq +0.7%
- In New York: BHP +3.5% Rio +1.9% Atlassian +1.1%
- Tesla +0.7% Apple +1% Amazon +1.8% Schwab -5%
- In Europe: Stoxx 50 +1.3% FTSE +0.7% CAC +1.1% DAX +1.3%
- Spot gold +0.9% to $US1981.81/oz at 1.41pm in New York
- Brent crude +1.3% to $US79.32 a barrel
- Iron ore +1.9% to $US125.15 a tonne
- 10-year yield: US 3.55% Australia 3.35% Germany 2.37%
- US prices as of 4.59pm in New York
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