Weaker US dollar boosts tech stocks: ECB hikes rates in Europe

US stocks were higher in rather choppy trading on Thursday, ending slightly below their best levels. The Nasdaq Composite rose on Thursday as shares of Tesla surged on better-than-expected earnings results. Tech stocks were also boosted by a weaker US dollar.

The tech-heavy Nasdaq gained 1.36% to close at 12,059.61. The S&P 500 added 0.99% to end at 3,998.95. Meanwhile, the Dow Jones Industrial Average gained 162.06 points, or 0.51%, during a choppy session. The blue chip index finished at 32,036.90.

The Nasdaq is expected to gain this week, up around 5.3%. Meanwhile, the Dow is up almost 2.4% for the week, while the S&P 500 climbed 3.5%.

Investors continued to look to tech stocks, which fueled this week’s rally as some strong corporate earnings results sent Wall Street searching for beaten assets.

Consumer discretionary stocks led the S&P 500 gains, up more than 2% thanks to Tesla shares. The automaker jumped about 9.8% after reporting better-than-expected results despite shrinking auto gross margins. Shares are still down almost 23% this year.

Growth outpaced value stocks by more than 125 basis points. Top-performing industries included software, semi-finished, streaming, casinos, apparel and accessories, automobiles, and exchanges. Oil services, pharmaceuticals, food and beverages, airlines, metals and mining were among the laggards.

More than 90 S&P 500 companies have now reported Q2 earnings so far, and 78% have reported results that beat analysts’ expectations.

Despite strong support from technology stocks this week since the start of the year, the sector remains the worst performing sector within the S&P500.

Meanwhile, the US dollar fell following a surprise interest rate hike from the European Central Bank, which raised rates for the first time in 11 years. The central bank raised key rates by 50 basis points. Today’s decision is the next crucial step in ending the era of the ECB’s ultra-loose monetary policy. The bank has already ended its multi-trillion-euro bond-buying programs and, after eight years, the end of its negative interest rate policy – aimed at inducing banks to lend generously – is in seen.

Consumer prices are rising at their fastest pace in a generation in Europe, climbing 8.6% in June from a year earlier amid rising energy and food costs. Policymakers must now strike a balance between easing price pressures and continuing a recession.

The decline of the US dollar was mentioned as another tailwind for equity markets given its increased presence as a drag on earnings. Moreover, some eased fears that Russia will significantly reduce gas flows to Europe.

The Australian dollar at 7:10 a.m. strengthened against the US dollar yesterday, buying 69.33 US cents (thump: 68.91 US cents), 57.82 British pence, 95.24 yen and 67.77 US cents. ‘euro.

Goods

Iron ore is 1.2% lower at US$96.40 a tonne. Iron ore futures are pointing down 0.6%.

Gold rebounded from a year-long low, gaining more than 0.8% on Thursday, benefiting from some safe-haven interest amid economic concerns as the dollar eased.

Silver was up $0.11 or 0.6% at US$18.78 an ounce.

Copper fell $1.90 or 0.6% to settle at US$330.60 per pound.

Bitcoin futures up 0.9%, from best levels.

Crude lost $3.30 or 3.3% to US$96.58 a barrel on Thursday due to higher gasoline inventories in the United States and after a rate hike from the European Central Bank (ECB) fueled demand concerns, as the return of oil supplies from Libya and the resumption of gas flows from Russia to Europe eased. supply concerns.

SPI futures point to a 0.2% gain.

Numbers around the world

On the other side of the Atlantic, the European markets closed on a mixed note. Paris gained 0.3%, Frankfurt lost 0.3% and London’s FTSE closed 0.1% higher.

Asian markets closed on a mixed note. Tokyo’s Nikkei gained 0.4%, Hong Kong’s Hang Seng lost 1.5% while China’s Shanghai Composite closed down almost 1%.

The Australian equity market added 0.5% to 6,794 yesterday.

Ex-dividends

There is a company ready to trade without the right to a dividend.

Uniti Group (ASX:UWL) pays 10.5 cents fully franked

Dividends payable

Three companies are ready to pay eligible shareholders today.

Eildon Capital Group (ASX:EDC)
Pengana Private Equity Trust (ASX: PE1)
Partners Group Global Income Fund (ASX:PGG)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

Mary I. Bruner