It was a good day on Wall St as US markets shook off their economic downturn fears, including those over China property developer Evergrande. The Federal Reserve also calmed the market, signalling a possible interest rate rise late next year.
This points to a strong start on the ASX this morning, following a 0.3% rise at close yesterday to 7,296.9.
Other noteworthy occurrences include Bill Gates $1 billion corporate fund raising, where he drew on the likes of BlackRock (NYSE:BLK)'s Larry Fink and Microsoft's Satya Nadella to finance a host of clean-energy projects.
Clean energy has well and truly shaped as one of the future star sectors of the investment scene.
Meanwhile, energy stocks finished the day ahead 2.3%, led by Woodside’s gains of 2.4% to $21.43.
Australia’s mining heavyweights also fared well after iron ore prices steadied overnight.
BHP finished the session up 2.4% to $38.66, Rio Tinto gained to 2.7% to $98.27 and Fortescue Metals rebounded 4.2% to $15.37.
Here’s what we saw:
- At about 6.30am (AEST) the SPI futures index was up 14 points or 0.2%.
- The Australian dollar was higher at US72.61.
- Iron ore rebounded after big falls earlier in the week, soaring 14.4% to $US107.55.
- Brent crude was up 2.5% at $US76.19 a barrel.
- Tin surged 4.5%.
- Copper lifted 3.6%.
- Aluminium rose 3.4%.
- Lead fell 0.4%.
- Gold futures price rose by US60 cents an ounce or less than 0.1% to U$1,778.80 an ounce.
- Spot gold was trading near US$1,767 an ounce at the US close.
Australian markets
While the S&P/ASX200 started the morning with a slight decline yesterday morning, it quickly reversed its trend and by lunchtime had lifted.
Today, we should see a positive start from the get-go, despite more protests planned today in Melbourne and the fall-out from that city’s earthquake, which was felt across the country.
News Corp (NASDAQ:NWS) investors will have their ear to the ground today, after the media giant’s board approved a $US1 billion ($1.4 billion) stock buyback.
This represents about 7.8% of News Corp's market capitalisation of $US12.8 billion before the program, which has no time limit, was announced.
Class A common shares and class B common shares are all on the table.
“These landmark decisions follow our most profitable year since the launch of the new News Corp in 2013 and are a tangible sign of our confidence in the inherent value and enormous potential of our businesses,” News Corp chief executive Robert Thomson says.
“With the board’s active support, we are acutely focused on long-term value for investors, balancing strategic investments and capital returns.
"Our robust cash balance and strong free cash flow have enabled us to launch a much larger, more aggressive buyback program that we intend to begin after our quiet period ends.”
Talking of heavy hitters, Solomon Lew’s Premier Investments Limited has almost doubled its annual profit, following a near 17% increase in sales.
Premier owns brands including Portmans, Just Jeans, Dotti, Peter Alexander and Smiggle and saw its profit surge 97% to $271.8 million: sales rose 19% to $1.4 billion.
This is despite the retailer currently having 661 stores closed.
“Today’s announcement is a testament to the skills and dedication of our entire global team,” Lew said.
“To have delivered these record results in a very difficult and volatile environment is a truly outstanding achievement.
Premier is "optimistic about the all-important second quarter of fiscal 2022, which covers Christmas trading, as the vaccine rollout progresses and the economy re-opens."
Australian indices
- ASX 200 rose 0.32% to 7,296.90
- ASX24 futures rose 0.2% to 7,290
- S&P/ASX Small Ordinaries rose 0.74% to 3,457.50
- All Ordinaries rose 0.41% to 7,593.80
US markets
Wall Street’s resurgence overnight came off the back of China’s Evergrande agreeing to a deal with domestic bondholders.
The deal should help Evergrande avoid missing one of its interest payments, thus appease market angst.
Meanwhile, the Fed kept interest rates low and signalled it could begin to reduce its bond purchases soon while raising interest rates as early as next year.
On the stock front, FedEx (NYSE:FDX) plunged 9.1% as it cut its profit forecast due to higher labour costs and expenses tied to global supply chain upheaval. Facebook lost 4%, blaming Apple’s iPhone privacy changes, which give users the ability to block tracking. Facebook says this is significantly hitting its advertising revenues as less data is collected.
Toast had a good first day as a public company up 56.3% in its first session.
US indices
- Dow Jones rose 1% to 34,258.32
- S&P 500 rose 1% to 4,395.64
- Nasdaq rose 1% to 14,896.85
European markets
It was a good day in Europe as well.
It seems the ‘Evergrande effect’ is influencing all markets.
European indices
- STOXX 600 rose 0.99% to 463.20
- German Dax rose 1% to 15,506.74
- UK FTSE rose 1.5% to 7,083.37