Markets Overview
- ASX SPI 200 futures little changed at 8,440.00
- Dow Average down 0.2% to 44,439.95
- Aussie down 0.1% to 0.6349 per US$
- US 10-year yield rose 6.8bps to 4.5444%
- Australia 3-year bond yield rose 5.5 bps to 3.93%
- Australia 10-year bond yield rose 5.4 bps to 4.51%
- Gold spot up 1.4% to $2,936.23
- Brent futures up 0.8% to $75.80/bbl
Economic Events
A rally in chipmakers drove stocks to all-time highs, while talks between US and Russia raised hopes of an end to the war in Ukraine.
The S&P 500 topped its January record.
Equities have been stuck in a narrow range amid uncertainities including tariffs, inflation and the geopolitical scenario.
To Matt Maley at Miller Tabak + Co., only a meaningful break of the S&P 500 above its record would be a compelling development.
“The high in January was only a very mild move above the record high set in December, and it fell right back into its sideways range very quickly.”
The S&P 500 rose 0.2%. The Nasdaq 100 added 0.2%. The Dow Jones Industrial Average wavered.
Intel Corp. jumped amid breakup speculation. Super Micro Computer Inc. jumped on a bullish outlook. Walgreens Boots Alliance Inc. soared as CNBC said a Sycamore Partners takeout is alive. Meta Platforms Inc. halted a 20-day rally.
The yield on 10-year Treasuries rose seven basis points to 4.55%. A dollar gauge added 0.2%. Bitcoin sank 2.3%.
“While we expect volatility to pick up in the near term amid a range of macro uncertainties, favorable fundamentals should continue to support global equities’ next leg up,” said Solita Marcelli at UBS Global Wealth Management. “Investors can consider capital preservation strategies to manage downside risks.”
At Piper Sandler, Craig Johnson says the market’s resilience has been impressive year-to-date as investors refuse to “back down.”
“We expect market conditions to remain choppy as investors rotate ‘down-cap’ amid declining Treasury yields, weakening crude oil, and a pullback in the US dollar.”
Global stocks have become the most-popular asset class with investors, who are showing the biggest willingness to take risk in 15 years, according to a survey by Bank of America Corp.
Fund managers’ cash levels fell to the lowest since 2010, while 34% of participants said they expect world equities to be the best-performing asset in 2025, the survey showed. A net 11% indicated they were underweight bonds.
Investors are “long stocks, short everything else,” strategist Michael Hartnett wrote in a note. About 89% of respondents said US equities were overvalued, the most since at least April 2001.
