Market Strategist
Summary: US equites stronger rallied on better than expected company news from Nike and Micron, while the White House thinks they can get Joe Manchin to vote in favour of Bidens $2 trillion green-energy program supporting the EV sector, and while economic recovery stocks charge as the Moderna vaccine is touted to fight Omicron. Oil jumps 4%, iron ore extends its rally up 3.9%, up 27% from November and now trades at four-month highs, while copper gained 1.3% as Chinas monetary easing and technical triggers buoy metals markets. Plus, the three elements to watch today.
Firstly - what you need to know now and consider
US stocks closed sharply higher in turnaround-Tuesday mode, recovering from Monday’s pull back, with all three of the US indices up almost 2% each, while the tech heavy Nasdaq rose 2.4%.
The risk-on-buying the dip mode switched was flicked on for three important reasons; Firstly Moderna said its booster can protect against Omicron, so traders bought the dip into economic recovery stocks, that supported Delta Air Lines and United Airlines shares rising 6%, while Carnival rose 9%. Secondly, better than expected company news was released - markets love that. Nike reported stronger than expected quarterly sales and earnings, offsetting a drop in China revenue and the slowdown in production and transportation. Nike shares rose 6%, with many thinking Nike's digital and online strategy and brand are “stronger than ever”, which should support long-term gains in market share. Shares in chipmaker Micron Technology rose almost 11% on reporting stronger than expected quarterly revenue, and giving bullish guidance. So, other chip makers like NXP Semiconductors and Advanced Micro Devices did well too. And the third reason sentiment got rosier was as the White House says it’s going to work on convincing Joe Manchin to vote for Bidens $2 trillion stimulus package (in the new year) that involves building 500,000 EV charging stations and giving Americans a $12,500 EV incentive.
What to watch now
Secondly, watch companies with Australian analyst rating changes
Thirdly, watch companies in the news
Markets - The numbers
Currencies: Euro little changed at $1.1281. Aussie up 0.6% to 0.7154 per US$ as the Prime minister Scott Morrison said on Tuesday that Australia must learn to live with the virus, while restrictions continue to ease and daily Covid cases hit record highs. The Kiwi is up 0.8% to 0.6764 per US$
AI: The good, the bad, and the bubble
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Charu Chanana,
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Mads Eberhardt,
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As inflation remains high central banks face hard decisions about whether they should keep hiking interest rates or stop. Meanwhile, the rise of AI creates bubble-like conditions that only make the decision harder.
Althea Spinozzi,
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