Australia

Australian shares are set to open higher, after a continued resurgence on Wall Street Friday.

ASX futures were up 0.3% or 22 points as of 8:00am on Monday, suggesting a higher open.

Renewed hope for interest-rate cuts later this year and a big day for technology shares fueled a rally Friday that lifted all three major US stock indexes to weekly gains.

The NASDAQ Composite Index gained 2.0%, the S&P 500 Index increased 1.3%, and the Dow Jones Industrial Average gained 1.2%.

In commodity markets, Brent crude oil was down 0.9% to US$82.96 a barrel, while gold was down 0.1% at US$2,301.74.

In local bond markets, the yield on Australian 2 Year government bonds was down at 4.09% while the 10 Year yield was also down at 4.41%. US Treasury notes were down, with the 2 Year yield at 4.82% and the 10 Year yield at 4.51%.

The Australian dollar was 66.08 US cents. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, was down at 99.48.

Asia

China markets were closed for the Labour Day public holiday.

Hong Kong's Hang Seng Index rose 1.5% to close at 18475.92, led by tech stocks.The benchmark index has rebounded 10% the past month, alongside stabilizing China economic data and also favorable support policies, DBS Group Research economist Samuel Tse writes in a note. Among advancers, JD.com rose 5.5%, Netease gained 4.7% and Baidu was 4.3% higher. Among decliners, WuXi AppTec fell 5.3%, Wuxi Biologics shed 4.1% and Zijin Mining Group edged 1.0% lower.

Japan markets were closed for the Constitution Memorial Day public holiday.

Indian shares ended lower as investors took profit after earlier gains. Investors also took a cautious stance after Federal Reserve Chair Jerome Powell's comments indicating that a rate cut might take longer than expected. Among major stocks, Tata Motors was down 1.4%, HDFC Bank was 0.9% lower and Tata Steel dropped 0.5%. Advancers included Bajaj Finance, which was 0.75% higher and ICICI Bank, which added 0.2%. The benchmark Sensex ended 1.0% lower at 73878.15.

Europe

Stocks in the U.K. rose Friday, with the FTSE 100 Index increasing 0.5% to finish at 8,213.49.

European shares ended the week higher, with the Stoxx Europe 600 index adding 0.5% to 505.53, the CAC 40 also adding 0.5% to 7,957.57 and the DAX 40 gaining 0.6% to 18,001.60.

North America

Renewed hope for interest-rate cuts later this year and a big day for technology shares fueled a rally Friday that lifted all three major stock indexes to weekly gains.

The NASDAQ Composite Index gained 2.0%, the S&P 500 Index increased 1.3%, and the Dow Jones Industrial Average gained 1.2%.

A host of surprisingly good corporate earnings reports late Thursday and Apple's unveiling of a $110-billion share buyback plan had traders betting even before the opening bell that stocks would rise.

The Labor Department's monthly jobs report then added to the optimism when it showed that hiring slowed in April and wage growth eased. The report marked a departure from a string of data that had shown surprising strength in the labor market and added to worries about lingering inflation.

Stocks sold off in April amid concerns that inflation would remain above the Federal Reserve's targeted level and delay interest-rate cuts. Friday's jobs report signaled that pressure is easing in the labor market without an abrupt drop in employment.

"That's what the market wants to see," said Matt Stucky, chief equity portfolio manager at Northwestern Mutual Wealth Management. "It doesn't want to see the jobs market break, it wants to see slowing, and slowing enough to where the Fed can start to cut rates."

The tech-heavy Nasdaq Composite led the way higher, rising 2% on Friday to finish the week up 1.4%. The S&P 500 gained 1.3% Friday and 0.5% during the week. The Dow Jones Industrial Average added 1.2%, or 450 points, to end the week 1.1% higher.

Futures traders stepped up bets that rates will fall this year after the data was released. Bond yields fell. The yield on the benchmark 10-year Treasury notes ended at 4.498%, down from 4.569% on Thursday. Yields fall as prices rise.

The Fed earlier this week acknowledged setbacks in its inflation fight but indicated that it was still more likely to lower interest rates than raise them again. Fed Chair Jerome Powell cited a slowdown in hiring as among the reasons to think high rates are cooling demand.

Doug Peta, BCA Research's chief U.S. investment strategist, said the pace at which the labor market is cooling could lead to a recession before year-end, and that he expects traders to reconsider their optimism toward late summer rate cuts.

Meanwhile, companies reporting quarterly earnings continued to surprise Wall Street to the upside.

"Earnings have been pretty darn strong in the first quarter, and they've also largely been devoid of warnings about the future that would concern investors," Peta said.

Apple gained 6% Friday in response to its big buyback plan and quarterly results that were disclosed after the market closed Thursday.

Investors also cheered financial reports from engineering and construction firm MasTec and concert promoter Live Nation Entertainment, which added 12% and 7.2%, respectively.

Amgen led both the Dow and the S&P 500 higher, rising 12% after the drugmaker gave an encouraging update on the development of its injectable weight-loss drug MariTide.

Travel booking business Expedia Group was the broader index's worst performer, shedding 15% after its results disappointed investors.

Shares of TD Bank fell 5.8% -- their sharpest daily decline since the pandemic lockdown in March 2020 -- to a new 52-week low. The Wall Street Journal on Thursday reported that the Justice Department is investigating how Chinese crime groups and drug traffickers used the Canadian lender to launder money from U.S. fentanyl sales.

 


Technology shares led stock indexes higher Thursday ahead of a key jobs report that will give investors their next look at how the U.S. economy is faring.

The tech-heavy Nasdaq Composite rose 1.5%, while the benchmark S&P 500 gained 0.9%, snapping two-day losing streaks for both indexes. The Dow Jones Industrial Average added 0.9%, or 322 points.

The Federal Reserve this week acknowledged a recent setback in its inflation fight but indicated that it was still more likely to lower interest rates than raise them again. That has helped support the appetite for riskier investments such as stocks over government bonds, which are viewed as safer to hold in periods of uncertainty.

"It was a little bit of a sigh of relief in that the Fed isn't thinking about restarting the hiking cycle," said Charlie Ripley, senior investment strategist for Allianz Investment Management. "You look at the general macroeconomic picture and things seem pretty solid, and the Fed reiterated that."

Record first-quarter sales from Amazon.com earlier this week also boosted optimism for big tech firms. After the market close, Apple reported quarterly sales and earnings that fell from a year ago, but not as much as analysts expected. The iPhone-maker also authorized $110 billion in stock buybacks, and its shares rose in after-hours trading.

Stocks have stumbled in recent weeks after a streak of firmer-than-expected inflation data dimmed expectations for rate cuts in 2024. Investors are now betting that the Fed will cut rates just once or twice this year.

For the year, the S&P 500 is still up 6.2%.

Investors will next turn their attention to the jobs report for April, due out Friday. Fed Chair Jerome Powell on Wednesday cited a slowdown in hiring as among the reasons to think high interest rates are cooling demand. Those remarks put renewed emphasis on how labor-market dynamics are playing out.

"Powell's comments indicated that their bias is still to cut," said Leah Traub, a fixed-income portfolio manager at Lord Abbett. "What was a little surprising to me is that they are now trying to shift to the labor market to support that cut."

Among individual stocks Thursday, Qualcomm shares jumped 9.7% after the chip company reported sales and profit that beat expectations. Moderna shares climbed 12.7% after it reported better-than-expected quarterly sales and signaled confidence that sales will pick up later this year.

Etsy shares fell to their lowest level in four years, tumbling 15.1%, after the e-commerce retailer posted lower-than-expected gross merchandise sales for the first quarter.

Paramount shares jumped 13% after reports that Sony Pictures and private-equity giant Apollo Global Management submitted a $26 billion all-cash offer for the company.