The ASX is set to open its first trading session after the Easter long weekend slightly higher despite a rocky night on Wall Street.
All three major US indices, which don’t close for Easter Monday, teetered between the red and the green on Monday night as investors await a string of crucial earnings reports this week that will shed more light on the impact of the Russia-Ukraine war and surging inflation.
The likes of Netflix, Johnson & Johnson, and International Business Machines are each set to release their latest earnings reports this week. Elon Musk’s Tesla will also release its earnings stats this week.
ASX futures rose 11 points or 0.15 per cent. The ASX 200 last closed near its highest point since early January at 7523.4 points on Thursday, April 14.
Trading volumes on Wall Street were thin on Monday following the shorter Easter break for US stocks, with the market looking for some direction as most global indices remained closed for Easter.
The Dow Jones Industrial Average slipped 39 points or 0.11 per cent after being up roughly 120 points at two separate points throughout the day. The Nasdaq Composite lost 19 points or 0.14 per cent after a similarly turbulent trading day. The S&P 500 shed a skinny 0.9 points or 0.02 per cent.
While investors await guidance from the upcoming earnings cues, eyes are looking elsewhere in the meantime.
“The overarching factors continue to be what does China look like with its zero-COVID policy, and what does the Fed look like going forward in terms of interest rates and inflation,” Jack Janasiewicz, a portfolio manager and lead portfolio strategist at Natixis Investment Managers, told Reuters.
“It’s going to be some time before either one gives us any clear direction. With that backdrop, I’m not shocked if we just continue to trade in a range.”
The benchmark 10-year US Treasury yield rose to 2.86 per cent after hitting a three-year high of 2.884 per cent earlier in the day as investors continue to assess inflationary pressure in the States.
The S&P 500 banks index gained 1.7 per cent overnight, largely driven by solid gains from Bank of America, which reported strong growth in its consumer lending business as it rounded out earnings season for the big Wall Street banks. Bank of America shares closed 3.5 per cent higher.
Big tech stocks were mixed, with Apple down 0.13 per cent, Microsoft up 0.25 per cent, and Alphabet up 0.75 per cent. Facebook owner Meta gained 0.28 per cent, while Nvidia climbed 2.47 per cent.
Futures traders seem to believe the positives outweigh the negatives for the Australian market today, anticipating a positive open after the long weekend.
This comes despite a warning from Chinese officials that COVID-19 lockdowns were starting to impact the country’s economy, with this impact to potentially bleed into commodity markets.
Following in the footsteps of the US, Australian 10-year bond yields jumped to 3.07 per cent following the Easter break.
The energy sector could deliver potential gains today as global oil prices climbed overnight.
More supply sanctions against Russia, along with the closure of Libya’s largest oil field amid a standoff between two rival governments, saw oil prices rise overnight.
Meanwhile, the financials sector could be impacted by AMP, which has confirmed it is in talks with Dexus and “multiple” other parties to potentially offload its real estate and infrastructure business.
The Australian dollar is up 0.11 per cent and buying 73.56 US cents.
Brent crude prices are up 1.18 per cent to US$112.91 a barrel overnight, with West Texas Intermediate up 0.79 per cent to US$107.82.
Gold is up 0.13 per cent to US$1977 an ounce, while copper is down slightly to US$10.276 a tonne.
Iron ore is currently worth US$150.50 per tonne, down slightly from yesterday’s close.