Buoyed by strong gains across the Information Technology sector (+2.28%), the S&P 500 started the week on a strong note, rallying close to 1.2% to close at 4019.81. The highs of the day were 4,039.
United States
The Nasdaq100 rallied over 2% to close at 11,872.54, the highest level since mid-December. Top performers included Advanced Micro Devices (AMD, +9.22%), Tesla (TSLA, +7.74%), and NVIDIA (NVDA, +7.59%). Equity market sentiment continues to improve as companies focus on cutting costs and inflation continues to show signs of easing.
Regarding the S&P500, from a technical perspective, prices are currently testing a key zone of resistance, being a combination of the declining trendline, drawn through the major peaks from 2022, as well as the 200-day moving average, which is often used as a gauge of the long-term trend for stock prices. A sustained break above the 4000-4050 region would be a bullish development, and likely trigger further gains over the coming weeks.
S&P500 – Daily Chart
Europe
Equities in Europe were higher on Monday, with the Euro Stoxx 50 gaining 0.75%, the German DAX rallied 69 points (+0.46%) to close at 15,102.95, while the UK’s FT100 closed at 7,784.67, up 0.18%.
*Note: These prices are based on futures and/or CFD pricing and may therefore differ slightly from spot pricing.
Australia
On Monday, the Australian share market closed largely unchanged with the benchmark ASX200 adding just 5 points (+0.07%) to finish the session at 7,457.26. Energy was the top performing sector, gaining 0.86%, with the likes of Karoon Gas (KAR) adding 7.41%, making it the top performer from the ASX200. The rally came on the back of a positive news announcement, whereby the company reported a 23% increase in the proved and probable reserves at their project in Brazil, taking the total reserve to 55 million barrels of oil. As can be seen on the weekly chart below, the Company’s share price closed the day at $2.32, not far away from recent highs of $2.45 from November 2022. Given the large consolidation pattern that has formed over the past 12 months, a break to new highs would likely kick off a sustained trend to the upside.
Karoon Gas (KAR) – Weekly Chart
Lithium stocks were also strong on Monday, with the likes of Liontown Resources (LTR) and Pilbara Minerals (PLS) gaining over 6% respectively. ASX SPi200 futures closed 25 points (+0.34%) higher in overnight trading at 7,426. Suggested a decent opening for Aussie stocks on Tuesday.
Commodities
From commodity markets, and energy prices were firmer in overnight trading, led by an 8.66% rally in natural gas prices, while Brent Crude Oil gained 0.55%. WTI Crude Oil closed unchanged at US$81.63 a barrel. Spot Gold edged higher by 0.27%, to close at US$1,931.31 an oz, extending the recent rally. Grain prices were softer, thanks to both favorable weather conditions and large plantings for the 2023 season, led by wheat which fell 2.66%, while corn prices dipped 2.66%.
Economic Data: Tuesday 24th
German GfK Consumer Confidence (FEB) 6 pm
France Business Confidence (JAN) 6.45 pm
German S&P Global Manufacturing PMI (JAN): 7.30 pm
UK S&P Global/CIPS Manufacturing PMI (JAN): 8.30 pm
Euro Area ECB President Lagarde Speech: 8.45 pm
This article was written by Oliver Gordon, Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via info@rivkin.com.au or by phoning +612 8302 3632.
