The Australian sharemarket is set to open stronger again as investors await the latest inflation figures, with ASX futures rising after Wall Street ended its longest slide this year amid a raft of corporate earnings. The Aussie dollar advanced.
ASX futures were up 26 points, or 0.4 per cent, at 6892 as of 6:49am AEDT. All eyes will be on the release of the September-quarter consumer price index later this morning for clues about the Reserve Bank’s next interest rate moves.
New RBA governor Michele Bullock signalled in a speech last night the central bank would closely examine this week’s inflation figures, warning another rate hike may be needed to control inflation.
The local bourse has a positive lead from Wall Street, where the benchmark S&P 500 index rose 0.7 per cent as of 6:15am AEDT ahead of tech giants Microsoft and Google’s parent company Alphabet reporting their results after the close. The Dow Jones Industrial Average added 0.8 per cent and the tech-heavy Nasdaq 100 gained 1 per cent.
The S&P 500 traded off session highs, led by losses in energy shares as oil slid below $US84 a barrel, but once again the index found support above the key 4200 mark. Verizon Communications, 3M and General Electric climbed on bullish forecasts. Facebook and Instagram owner Meta dropped after being sued by California and dozen of other US states over harmful youth marketing claims. Bitcoin briefly topped $US35,000, while Treasury 10-year yields edged lower, following Monday’s intense volatility.
Investors looking to the earnings season for a dose of good news are hanging their hopes on big tech. The five biggest companies in the S&P 500 — Apple, Microsoft, Alphabet, Amazon and AI chipmaker Nvidia — account for about a quarter of the benchmark’s market capitalisation. Their earnings are projected to jump 34 per cent from a year earlier on average, according to analyst estimates compiled by Bloomberg Intelligence.
“As these big tech stocks go, so does the overall market,” said David Trainer, chief executive officer of New Constructs. “Strong big tech earnings may just be what’s needed to end the stock market correction that started in late July. If big tech companies blow their numbers out of the water and provide strong guidance for future earnings, then we could see the stock market rally strongly through the end of the year.”
Rising rates have made already stretched big tech valuations look increasingly expensive, with the group remaining the most-crowded trade among fund managers, according to Bank of America.
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