Stocks rose Tuesday as Wall Street shook off a surprise move from the Bank of Japan that sent global bond yields up.
The Bank of Japan caught investors by surprise with an unexpected change to a core tenet of its monetary policy, sending shockwaves across the currency, bond and equity markets. Traders described an adjustment to the longstanding yield curve control measures as potentially marking a “pivot” by the BoJ, the last of the world’s leading central banks to stick to an ultra-loose regime.
A handful of big companies will report their quarterly results this week ahead of the Christmas holiday. Nike and FedEx are set to report after the bell.
The Dow Jones Industrial Average rose 92.20 points, or 0.28 per cent, to close at 32,849.74. The S&P 500 gained 0.10 per cent to 3,821.63, while the Nasdaq Composite ticked up 0.01 per cent to close at 10,547.11.
It’s been a rough year for stocks, from the market’s yearly high on January 3 to this morning, US stocks have shed $11.7 trillion in market cap and off that $11.7 trillion, more than $5 trillion in losses come from just five companies – Apple, Microsoft, Amazon, Alphabet, Meta and Tesla.
In tech news, Epic Games will pay $520 million to settle an F.T.C. investigation. The maker of Fortnite was accused of illegally collecting children’s personal information, matching them with strangers while enabling live communications and using “dark patterns” to trick kids into paying for in-game items. The fine easily set a record for child privacy violations.
Tech start-ups that have traditionally relied on deep-pocketed Silicon Valley investors to fund ambitious growth plans are being forced into alternative financing deals to sustain their businesses and avoid drastic cuts in valuation. A sharp decline in venture capital dealmaking, alongside a closed market for initial public offerings, has resulted in a funding crunch for many private technology companies over the past year.
Company founders are entering into debt-focused deals such as bridge loans, structured equity, convertible notes, participating bonds and generous liquidation preferences. These moves are designed to avoid the dreaded “down round” of funding
Across the sectors, Energy was the big stand out, closing 1.52 per cent higher. This was followed by Communication Services and then Materials, which closed 0.73 per cent and 0.65 per cent higher respectively.
Best performing thematics included live streaming, Chinese education stocks and UK banks
The SPI futures are pointing to a 0.8 per cent gain.
One Australian dollar at 8:10 AM has weakened compared to the US dollar yesterday buying 66.78 US cents (Tue: 66.95 US cents).
Iron ore futures are pointing to a 0.2 per cent gain. Iron ore is 1.2 per cent higher at US$110.50 tonne.
Gold gained 1.7 per cent. Silver jumped 5.2 per cent. Copper added 0.6 per cent and oil gained 1.2 per cent.
Figures around the globe
Across the Atlantic, European markets closed mixed. Paris fell 0.4 per cent, Frankfurt lost 0.4 per cent and London’s FTSE closed 0.1 per cent higher.
In Asian markets, Tokyo’s Nikkei lost 2.5 per cent, Hong Kong’s Hang Seng fell 1.3 per cent and China’s Shanghai Composite closed 1.1 per cent lower.
Yesterday, the Australian sharemarket fell 1.5 per cent to close at 7024.
Dalrymple Bay Infrastructure (ASX:DBI)
Fisher & Paykel Healthcare Corp (ASX:FPH)
Incitec Pivot (ASX:IPL)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
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