Pre-Market Report - Wednesday 7th August - US Rally Fizzes - SPI Down 17 - US Earnings in Focus

ASX to slip. SPI Futures down 19 points (-0.25%).

US equities snapped a three-day wild rout as investors piled back into the market following recent comments by Fed officials easing US recession concerns. The S&P 500 rose 1.04%, with all major sectors finishing the green, supported by bargain hunters after the index fell into “oversold” territory. The NASDAQ advanced 1.03%, supported by gains in the Nvidia up 3.8%. The Dow Jones ended 294 points higher (+0.76%), paring earlier gains in late afternoon trade. Up 746 points at best. Down 65 points at worst. Small caps Russell 2000 gained 1.23%, and the VIX saw its biggest daily fall since 2010, down 28.16%. US treasury yields jumped as fears of a US recession were seen as overdone. 10Y yield up 12.2bps and 2Y yield up 9bps. In Fed speak, fed officials pushed back against hard landing and recession concerns. Fed’s Daly said the US economy is not falling off a cliff and pointed to the Jobs numbers that included higher numbers of temporary layoffs and supply increases. In Asia, Japan’s TOPIX rebounded 9.3%. Japanese officials trying to calm markets, with the prime minister urging calm while highlighting coordination between the government and the BoJ.

COMMODITIES

• Oil prices settle higher; signs of tighter supply end 3-day swoon.
• Gold eases as dollar, yields firm; Fed rate cut hopes lend support.
• Copper recovers, but investors wary about economy, China.
• Aramco profit dips 3%, keeps $31.1bn dividend unchanged.
• EIA sees tighter US oil market for 2024, lowers price outlook.

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