US stocks soared after the Fed raised the interest rate by 25 basis points, while Chair Powell indicated that "certainly possible" that the Fed will keep its benchmark interest rate below 5%. Powell’s dovish tone further boosted risk-on sentiment and send the US bond yields down, with yields on both 2-year and 10-year notes diving 11 basis points. The US dollar index fell below 101 for the first time since April 2022, promoting gold futures to surge to a fresh 9-month high of above 1,965. The crude oil, however, fell on demand concerns.
On the earnings front, Meta Platforms surged 17% in after-hours trading amid better-than-expected fourth-quarter revenue and a $40 billion shares buyback. The rally of its shares may fuel the earnings optimism and promote the tech-heavy index, Nasdaq to continue to outperform throughout February. Investors will be awaiting the last bunch of major tech earnings reports, including Apple, Amazon, and Alphabet to release their final quarter performance on Friday. The US non-farm payroll for January will be also in the spotlight.
Equity futures point to a mixed open across the APAC region, with ASX futures up 0.55%, Nikkei 225 futures rising 0.44% and Hang Seng Index down 0.16%.
- 9 out of the 11 sectors in the S&P 500 finished higher, with Technology and Consumer Discretionary leading gains, up 2.2% and 1.9%, respectively. By contrast, Energy slumped 2% amid a further drop in gas and oil prices on demand concerns. All the major tech shares were higher, with Apple up 0.8%, Amazon up 2%, and Alphabet rising 1.6%.
- Meta Platforms’ shares soared 17% after-hour on better-than-expected fourth-quarter revenue and a $40 billion buyback. The social media’s earnings per share (EPS) are at $1.76 on $32.17 billion in revenue. The consensus called for $2.12 in EPS and $ 31.53 billion in revenue. Its Daily Active Users are at 2 billion, beating an expectation of 1.99 billion. After a brutal 2022, Meta has finally reversed its losing streak but its shares are still 53% down from its all-time-high in September 2021.
- Eurozone inflation fell for the third consecutive month in January, thanks to a further decline in energy prices. The headline infliction in the region fell to 8.5%, sharply declining from the prior month of 9.2%. While business confidence has also picked up, the EU’s economy may not be as bad as previously projected. The Eurodollar rose to just under 1.11, the highest seen in April 2022.
- Gold spiked as the US dollar declined further due to a sharp slip in the US bond yields after Powell’s downgrade on the terminal interest rate. The gold futures jumped above the previous key resistance of 1,940, up 1%, to 1,967, heading off the 2,000 mark.
- Crude oil resumed losses as the US inventories hit a 20-month high, while the OPEC+ committee recommends no change for oil output, sparking renewed outlook concerns Despite China’s reopening, weakened demand globally and a possible excessive supply darkened the oil market’s outlook.
- Cryptocurrencies jumped amid risk-on sentiment following the tech shares’ surge. Both Bitcoin and Ethereum rose to their two-week highs, at above 23,600 and 1,630, respectively. A breakout of these key resistance levels may take the two leading digital coins to further test the next potential long targets of 25,000 and 1,700.
Disclaimer: CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.
