Australia

Australian shares are set to pare yesterday’s losses at the open as US stocks eked out gains following heavy losses earlier in the week.

ASX futures were up 52 points or 0.7% at 7285 as of 8.00am on Thursday, suggesting a positive rebound after yesterday's 0.8% decline.

The S&P 500 trimmed gains as high as 1.6% in late-afternoon trading on Wednesday to finish up 0.2%. The benchmark index fell 2.8% a day earlier. The Dow Jones Industrial Average gained 0.2% in a similar day of trading. The technology-heavy Nasdaq Composite slipped less than 0.1%. The index is up more than 1% in after-hours trading as Meta Platforms jumps close to 20% after reporting strong user growth.

Sharp declines in US equities over the past week have added to the year’s negative performance. The S&P 500 is down 12% and the Nasdaq Composite down 20%. On Tuesday, the Nasdaq closed at its lowest level since December 2020, wiping out the gains it notched in 2021.

Volatility comes as investors scramble to price in the impact of increasingly aggressive moves by central banks around the world to bring inflation under control by raising interest rates and slimming balance sheets. Covid-induced lockdowns in Chinese manufacturing and commercial hubs, the impact of Russia’s invasion of Ukraine on commodity prices and signs of slowing economic growth are also weighing on equities.

Seema Shah, chief strategist at Principal Global Investors, said she sees the next moves in the stock market as either sideways or down.

Earnings are "supporting the market to some extent, but I don't think it's enough to support it higher," Ms. Shah said. She said her team has moved to a neutral recommendation on their overall equity positions.

"The risks are just piling up," she said. "We don't want to be picking up pennies in front of the steamroller."

Locally, the S&P/ASX 200 closed 0.8% lower at 7261.2, posting a third consecutive loss as traders sold shares of tech companies and other businesses exposed to economic uncertainty.

With the Nasdaq Composite having hit a 16-month low, the Australian tech sector fell 2.4%, taking its losses to 9.0% across four sessions and to 25% so far in 2022.

Life360 shed 29% after scrapping plans for a US listing, while Block lost 5.9%, EML Payments gave up 5.7% and Appen fell 4.3%.

Consumer stocks also dropped, while banks NAB, Commonwealth, Westpac and ANZ fell between 1.65% and 2.6%. Commodity stocks bounced, paring overall losses.

Australian prices soared to their highest level since the introduction of the Goods and Services Tax in the March quarter, according to data released on Wednesday. Markets are now pricing in a rate hike as soon as next week’s Reserve Bank meeting following the 5.1% jump in consumer prices.

In commodity markets, iron ore rose 1% to $US140.45 a tonne; gold futures lost 0.8% to $US1888.70 an ounce; Brent crude oil added 0.2% to $US105.15 a barrel.

In local bond markets, the yield on the Australian 2 Year bond rose to 2.35% while the 10 Year edged down to 3.05%. Overseas, the US Treasury 2 Year closed at 2.59%, while the 10 Year finished at 2.83%.

The Australian dollar fell 0.04% to 71.22 US cents, down from the previous close of 71.25. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, rose to 95.21.

Asia

Chinese stocks rebounded from recent weaknesses on Wednesday, after Beijing called for a ramp-up in infrastructure construction to drive growth, lifting machinery and building-material sectors.

Anhui Conch Cement added 4.9% and Inner Mongolia Baotou Steel climbed 5.0%, while Sany Heavy Industry jumped 6.9%. The renewable-energy industry also advanced, with electric-vehicle battery maker CATL, LONGi Green Energy and Tongwei surging 7.2%-9.0%.
Index heavyweight Kweichow Moutai gained 3.6% after posting higher 1Q profit.

The Shanghai Composite Index recovered after a sharp selloff over the two previous sessions, rising 2.5% to 2958.28; the Shenzhen Composite Index and the ChiNext Price Index strengthened 3.9% and 5.5%, respectively.

Hong Kong stocks ended slightly higher, continuing their recovery from Monday's selloff as equity markets in China rebounded. The benchmark Hang Seng Index edged 0.1% higher to settle at 19946.36.

Consumer companies rose, with the sector building on a rebound following earlier declines amid China's pandemic resurgence. Restaurant operator Haidilao jumped 11% and smartphone maker Xiaomi gained 3.1%.

The Nikkei Stock Average closed 1.2% lower at 26386.63 amid growing worries over earnings outlooks due to higher costs of raw materials and parts.

Electronics stocks were lower, with Panasonic, Fujitsu and Olympus falling 1.6%, 0.6% and 4.3%, respectively. Robotics company Fanuc ended 5.7% lower after it reported a drop in its 4Q net profit. Bicycle parts maker Shimano fell 13% after it posted disappointing 1Q earnings.

Europe

European markets traded mixed as investors remained cautious amid potential pitfalls.
The Stoxx Europe 600 was up 0.7%, the French CAC 40 rose 0.2% and the German DAX traded flat.

"We're seeing a little bit of positivity back in the markets Wednesday, but there's still plenty of underlying unease amid a mixed bag of earnings and rising uncertainty," Craig Erlam at Oanda says.

"When Russia is cutting off gas supplies to Poland and Bulgaria in response to their refusal to pay in roubles, following Putin's decision to change the terms of payment, you can understand why."

North America

US stocks edged higher in choppy trading Wednesday, clawing back some of their losses after selling off sharply a day earlier.

It was a day of fluctuations, with the S&P 500 and Dow Jones Industrial Average hitting session highs in the early afternoon before paring their gains into the close. The Dow industrials ranged about 588 points between their high and low of the day.

The S&P 500 and Dow Jones Industrial Average gained 0.2%, respectively. The technology-heavy Nasdaq Composite slipped less than 0.1%.

Investors said they saw the moves higher as a temporary relief rally after Tuesday's selloff, when the Nasdaq recorded its largest one-day percentage decline since September 2020 and the Dow dropped more than 800 points. Analysts and money managers have been digesting earnings reports and weighing concerns about inflation, the prospect of rapid policy tightening by the Federal Reserve and the spread of Covid-19 in China.

"Stocks have been so weak so far this month I believe investors are seeing some value in the current pricing," said Tracie McMillion, head of global asset allocation strategy at Wells Fargo Investment Institute.

Major US stock indexes remain down substantially for the year, with the S&P 500 down 12% and the Nasdaq Composite down 20%. On Tuesday, the Nasdaq closed at its lowest level since December 2020, wiping out the gains it notched in 2021.

The market is in the thick of corporate earnings season. Analysts expect that profits from companies in the S&P 500 grew 7.5% in the first quarter from a year earlier, according to FactSet.

Seema Shah, chief strategist at Principal Global Investors, said she sees the next moves in the stock market as either sideways or down.

Earnings are "supporting the market to some extent, but I don't think it's enough to support it higher," Ms. Shah said. She said her team has moved to a neutral recommendation on their overall equity positions.

"The risks are just piling up," she said. "We don't want to be picking up pennies in front of the steamroller."

Many big companies are reporting earnings this week. Shares of Facebook parent Meta Platforms rose 14% in after-hours trading after the company beat earnings expectations. Twitter, which this week agreed to sell itself for $44 billion to Elon Musk, is set to report Thursday.

About 80% of S&P 500 companies that have reported earnings so far have surpassed analysts' estimates, FactSet data show. Still, Emily Roland, co-chief investment strategist at John Hancock Investment Management, said investors remain focused on a number of wide-ranging issues weighing on markets.

"Markets are mostly focused on some of the macro concerns around aggressive tighter Fed policy, as well as this global growth scare that's playing out," she said.

Many of those concerns have driven the dollar to its highest level in more than two years. The dollar tends to strengthen when the global economy sours and when investors expect US growth to outpace the rest of the world. Rising interest rates in the US also typically benefit the greenback as higher rates attract yield-seeking investors to the currency.

The WSJ Dollar Index, which tracks the currency against a basket of others, rose to 95.19, on pace for its highest close since March 2020.

In the bond market, the yield on the benchmark 10-year US Treasury note rose to 2.817% on Wednesday from 2.773% on Tuesday. Recently, investors have sold bonds in anticipation of higher interest rates, and the yield on the benchmark note remains close to its highest level since 2018. Bond yields and prices move inversely.

Natural-gas prices in Europe rose 4.1% after Russia said it would halt gas flows to Poland and Bulgaria over their refusal to pay on Moscow's new terms. Brent crude, the international benchmark for oil prices, rose 0.3% to $105.32 a barrel.

Among individual stocks, Tesla shares added $5.09, or 0.6%, to $881.51, recouping some of their losses after tumbling 12% Tuesday, their biggest one-day drop in more than a year. Twitter fell $1.04, or 2.1%, to $48.64, about 10% below the $54.20 per-share-price that Elon Musk and Twitter agreed to in their deal to take the company private.

Boeing shares lost $12.58, or 7.5%, to $154.46. The company posted a $1.24 billion quarterly loss and again pushed back the expected first delivery of its new 777X twin-aisle jet.

Microsoft jumped $13.00, or 4.8%, to $283.22 after the company on Tuesday reported higher revenue and profit last quarter as demand for its cloud services and software continued to climb. Shares of Google parent Alphabet fell $87.11, or 3.7%, to $2285.89 after the technology behemoth posted slower sales growth amid disruptions in digital advertising spending.

Chipotle Mexican Grill shares added $37.42, or 2.6%, to $1475.63 after the burrito chain said total revenue increased 16% last quarter amid higher food, beverage and packaging costs -- which the company said was partially offset by menu-price increases.

Lucid Group shares gained 43 cents, or 2.4%, to $18.07 after the company late Tuesday said the government of Saudi Arabia had agreed to purchase up to 100,000 vehicles over a 10-year period.

Robinhood Markets shares fell 49 cents, or 4.9%, to $9.51 after the online brokerage said it was laying off 9% of its full-time employees. The company is set to report earnings Thursday.