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29/06/2023

Today’s Announcements & News

Asia

In the Asia-Pacific region, the markets had a mixed performance as investors reacted to the latest economic data. Australia’s S&P/ASX 200 index surged by 1.10%, recording its largest one-day gain since April 11. The country’s inflation rate for May came in lower than expected at 5.6%, easing concerns of higher inflation. Japan’s Nikkei 225 index rebounded over 2% after three consecutive days of losses, crossing the 33,000 mark. The Topix index also saw a strong surge of almost 2%. However, South Korea’s Kospi index and Kosdaq index both recorded a second straight day of losses, ending down 0.67% and 0.82% respectively. In Hong Kong, the Hang Seng index reversed earlier losses and climbed 0.3% in the final hour of trade. On the other hand, mainland Chinese markets were in negative territory as China’s industrial profits declined by 18.8% in the first five months of 2023. The Shanghai Composite index ended marginally lower, while the Shenzhen Component index saw a larger loss of 0.47%.

United States

In overnight trading on Wednesday, stock futures showed slight gains as the market approached the end of the second quarter and the first half of 2023. Futures on the Dow Jones Industrial Average rose 72 points, while S&P 500 futures increased by 0.2% and Nasdaq 100 futures climbed 0.3%.

After-hours trading saw Micron Technology shares rise by 2% following the chipmaker’s announcement of higher-than-expected revenue for its latest quarter, citing increased industry demand. JPMorgan and Bank of America also experienced gains of more than 1% in after-hours trading after passing the Federal Reserve’s annual stress test.

The stock market has shown strong performance in the first half of 2023, with the S&P 500 up 14% and the Nasdaq Composite climbing nearly 30%. The Dow has had a more modest gain of 2% this year. However, many on Wall Street anticipate a potentially volatile second half of the year.

Investors are closely monitoring comments from Federal Reserve Chair Jerome Powell, who recently spoke about the tightening cycle and the Fed’s commitment to fighting inflation. Powell’s remarks at a forum sponsored by the European Central Bank suggested that more restrictive policies and consecutive interest rate hikes could be on the horizon. Powell is scheduled to speak at a conference in Madrid on Thursday, where his comments will be closely watched.

Additionally, traders will pay attention to Thursday’s weekly jobless claims data to assess the state of the labor market. The S&P 500 is on track for its best monthly performance since January, with a 4.7% increase in June, and is poised for its third consecutive positive quarter with a 6.5% gain in the second quarter.

Commodity

On Wednesday, oil prices experienced a 3% climb as U.S. crude stockpiles saw a larger-than-expected draw for the second consecutive week. This helped offset concerns about potential interest rate hikes impacting economic growth and global oil demand.

Brent futures settled at $74.03 per barrel, rising $1.77 or 2.5%, marking the highest close for Brent since June 26. Similarly, U.S. West Texas Intermediate (WTI) crude settled at $69.56 per barrel, rising $1.86 or 2.8%, representing the highest close for WTI since June 21.

The U.S. Energy Information Administration (EIA) reported a significant drop of 9.6 million barrels in crude inventories for the week ending June 23. This figure surpassed analysts’ expectations of a 1.8-million barrel draw in a Reuters poll and also exceeded the 2.8-million barrel draw recorded in the same period last year. It also surpassed the average draw for the corresponding five-year period from 2018 to 2022.

In contrast, gold prices experienced a decline to their lowest level in almost four months due to expectations of higher interest rates and Federal Reserve Chair Jerome Powell’s reiterated hawkish stance. Spot gold fell 0.21% to $1,909.318 per ounce, reaching its lowest level since mid-March. U.S. gold futures settled 0.1% lower at $1,922.20.

Powell emphasized the likelihood of further rate increases by the central bank and did not rule out the possibility of an interest rate hike at the policy meeting scheduled for the end of July.

The above analysis is only for the views of market researchers and is for reference only and is not regarded as a specific investment suggestion.

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