After a cautious session in New York overnight, Australian futures are indicating a softer open for the ASX. Latest futures are down 15pts (-0.18%) as of 8:30 am AEDT.
In New York, both the S&P 500 and Dow Jones broke its 2-day slide as the The Dow Jones Industrial Average rose 0.60%, S&P 500 0.26% and Nasdaq Composite was up 0.25%. Both the S&P 500 and Dow Jones edged lower, with investors engaging in mild profit-taking. The pullback was orderly, with trading volumes thinning and volatility remaining closed.
Markets appear to be reassessing positioning after investors welcomed great earnings from the worlds largest asset manager, two of Wall Street’s biggest banks and a key supplier to the artificial-intelligence boom.
BlackRock surged 6.0% after earnings rising 10% on strong ETFs and pulling in client cash, lifting total assets to a record $US14 trillion.
Goldman Sachs rose 4.6% after it exceeded expectations for trading revenue, posting an all-time record of $US4.31 billion in Q4. Morgan Stanley shot up 5.8% after the lender’s debt bankers increased revenue by 93% in Q4.
Oil slides looming US military action against Iran
Oil falls more than 4 to $US 59.20 a barrel, breaking a streak of gains after US President Donald Trump threats to take military action against Iran amidst civil unrest on the back of anti-regime protests across the country.
Trump’s softer rhetoric after comments that executions were not going to proceed lowered the threat and urgency of a US response. But the President warns of consequences if the violence continues.
Semiconductor and AI stock rallies
TSMC posted a strong capex guide at $US52 to 56 billion, well above the 10-15% consensus and almost 40% higher than the previous year showing an accelerated capacity to meet demand in the AI sector. TSMC’s strong signal caused other stocks such as Applied Materials, AMD and ASML to rally.
The White House placed exemptions on imported chips used to build out U.S. supply chains from new 25% tariffs further boosting sentiment.
Rio Tinto-Glencore merger
Rio Tinto and Glencore are talks turn to how a potential US$300 billion merger would be structured and carved-out, with copper being the logic and coal being the main complication.