The markets in the US rallied on Thursday with speculation on AI focused stocks, while jobless claims data added to trader sentiment.
United States
Markets in the US rose on Thursday amidst the frenzy of AI-focused tech stocks. Notable gains in stocks included NVDA (2.76%), AMD (2.73%) Adobe Inc. (5%), and AAPL (1.55%). Economic data revealed that the number of individuals applying for unemployment in the first week of June rose by 28,000 to 261k, much higher than the forecast 235k. While the number of individuals who continue to remain unemployed was down from 1794k to 1757k during the final weeks of May. The data imply a weakening labor market, as businesses find it more challenging to stay profitable in the face of a declining economy. Investor focus will now shift towards the upcoming Fed board meeting next week after the RBA and BoC surprised markets by raising their interest rates.
The S&P 500 closed 0.62% higher on Thursday, with 63% of the index closing in the green. Consumer discretionary, information technology and consumer staples were the star performers rising by 1.56%, 1.20%, and 0.74% respectively. Real estate fell by -0.62%, energy declined by -0.44%, and materials slid by -0.35%. The Dow was up by 0.50%, the Nasdaq firmed by 1.02% while the Russell 2000 Index declined by -0.41%. The yield on the 2-Year treasury bond declined 3 basis points to 4.51%. While the yield on the 10-Year fell 7 basis points to 3.72% and the yield on the 30-Year bond fell 5 basis points to 3.8%. The VIX Index fell -2.08% to 13.65.
Europe
The Euro STOXX 600 Index closed slightly lower at the end of trading on Thursday. The Index slipped -0.05%, despite seven out of the eleven sectors closing in the green. The energy was the star performer, rising 0.34%, while materials and consumer discretionary both rose above 0.20%. The gains were offset by the decline in communications, which dropped by -1.01%. Real estate declined by -0.20% while consumer staples slid by -0.55%. Elsewhere, the CAC closed 0.27% higher, the DAX added 0.18%, while the FTSE declined by -0.32%.
Economic data revealed that the region’s GDP grew at a slightly slower pace in the first quarter of 2023, rising 1% compared to forecasts of 1.2%. Elsewhere, Japan’s GDP grew by 2.7% during the first quarter of 2023, beating forecasts of a rise of 1.9%, and higher than last quarter’s 0.4% rise.
*Note: These prices are based on futures and/or CFD pricing and may therefore differ slightly from spot pricing.
Australia
The ASX is expected to open higher on Friday, with ASX futures up by 0.41% at 7,133. The ASX closed -0.26% lower at 7099. Interest rate-sensitive sectors declined, with information technology dropping -by 3.82%, real estate losing -2.49%, and consumer discretionary falling by -1.39%. The energy was the star performer gaining 1.33%, utilities were up 0.93% and materials edged -0.56% higher. Mining companies benefited from rising commodity prices. Rio Tinto gained 2.1%, BHP was up by 1.2%, and Fortescue Metals added 1.7%. New Hope Corp. was the star performer of the index climbing 8.60%. Meanwhile, Imugene was the biggest laggard declining -7%. In energy, Beach Energy jumped 3.4%, Woodside Energy rallied 1.1% and Santos edged up 0.70%. In real estate, Mirvac fell -3.4% while Goodman and GPT dropped -3.3% each. In contrast, economic data revealed the country’s exports fell -5%, from A$14.82 billion in March to A$11.15 in April. The yield on the Australian 10-Year bond was 4.01%, while the local currency strengthened against the greenback by 0.6% to 0.66.
Commodities
In commodities, oil prices declined with WTI and Brent Crude falling -2.22% and -1.83% to $70.92 and $75.54 respectively. In precious metals, spot gold rose by 1.31% to $1,965, while spot silver was up by 3.50% to $24.23. Industrial metals rose with copper rising 1.04% to $380, nickel firmed 2.15% to $21,336, and SGX Iron Ore jumped 1.42% to $107. The price of Bitcoin was up 0.8% to $26,644.
Economic Calendar
9th June 2023
China Inflation Rate (YoY May) 11:30
China PPI (YoY May) 11:30
EuroZone ECB de Guindos Speech 18:00
Canada Unemployment Rate (May) 22:30
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.
