Australia Business

Technology rebound helps pare week of losses on Wall Street


In a note, Wedbush Securities Dan Ives said “this is not a Dot-com Bubble 2.0 in our opinion, it’s a massive over correction in a higher rate environment that will cause a bifurcated tech tape with clear HAVES and HAVE NOTS of tech”.

Ives said he and his colleagues are holding fast on their bullish view of tech overall.

“We have stress tested our tech models and believe in a worst case scenario Street numbers for 2023 come down by less than 10 per cent, while in a base case scenario they are unchanged from today and in a soft landing scenario actually going up from current numbers. We believe these stocks are pricing in a ‘hard landing’ with fears abound.”

Among the buyers during the sell-off, corporations.

Market highlights

ASX futures up 54 points or 0.8 per cent to 7110 near 7am AEST

  • AUD +1.1% to 69.30 US cents
  • Bitcoin on bitstamp.net +1.6% to $US29,476.54 9.15am AEST
  • On Wall St: Dow +1.5% S&P 500 +2.4% Nasdaq +3.8%
  • In New York: BHP +2.5% Rio +2.2% Atlassian +12.3%
  • Tesla +5.7% Twitter -9.7% Apple +3.2% Amazon +5.7%
  • Netflix +7.7% Meta +3.9% Microsoft +2.3%
  • In Europe: Stoxx 50 +2.5% FTSE +2.6% CAC +2.5% DAX +2.1%
  • Spot gold -0.7% to $US1809.76/oz at 4.12pm New York time
  • Brent crude +3.7% to $US111.46 a barrel
  • US oil +4% to $US110.35 a barrel
  • Iron ore -0.2% to $US127.35 a tonne
  • 2-year yield: US 2.58% Australia 2.52%
  • 5-year yield: US 2.87% Australia 3.03%
  • 10-year yield: US 2.92% Australia 3.39% Germany 0.94%
  • US prices as of 4.59pm in New York

From today’s AFR Weekend

I’ll change: PM’s desperate plea to undecided voters: The prime minister’s message throughout the campaign has been that you don’t need to like him to elect him. But now he’s changed his tune.

A week of Terra: behind the collapse of a $26b stablecoin: The collapse of Terra coin has sent shockwaves through the market. This is how it happened.

Aussie crypto investors, exchanges ensnarled in terra crisis: The value of cryptocurrency luna plummeted to zero on Friday after associated stablecoin terraUSD collapsed, leaving Australian investors nursing major losses.

How to build an investment bank after a false start: Perhaps the key meeting in the establishment of Barrenjoey – which has stoked envy, frustration and fascination in equal measure among rivals, despite the unraveling of a major backer – was one that occurred quietly.

COVID-19 cases rise ahead of more infectious winter wave: With temperatures dropping across the southern states, the national seven-day average has leaped from around 41,000 daily cases to nearly 48,000.

United States

Elon Musk sows doubt over his Twitter takeover: Elon Musk tweeted his bid was “temporarily on hold”, with Twitter’s shares dropping on concern the billionaire may be seeking to renegotiate or walk away.

The University of Michigan’s preliminary consumer sentiment index tumbled 9.4 per cent to 59.1 early this month, the lowest reading since August 2011. Economists polled by Reuters had the index dipping to forecast 64.

JPMorgan chief executive Jamie Dimon will find out on Tuesday how shareholders feel about a special $US52.6 million stock option award he received to stay on for five more years, which is opposed by two key investor advisory firms.

Robinhood Markets surged after Samuel Bankman-Fried, the chief executive and founder of cryptocurrency exchange FTX, revealed a 7.6 per cent stake in the brokerage app company.

US air-safety regulators have told Boeing the documentation it submitted to win approval to resume 787 deliveries to airlines after a year is incomplete, Reuters reported.

Europe

European shares rose on Friday, closing higher for the first time in five weeks.

The pan-European STOXX 600 index rose 2.1 per cent, with travel and leisure, banks and personal and household stocks leading gains.

Among individual stocks, Deutsche Telekom gained 2.1 per cent after it raised its earnings guidance.

Wind turbine maker Vestas dropped 4.4 per cent, after Berenberg downgraded the stock to “hold”.

Norwegian Air gained 2.4 per cent, as the airline posted a quarterly loss and said the surge in fuel costs would partly offset the effects of increased summer bookings.

Asia

China stocks rose on Friday as Shanghai said it aimed this month to halt the spread of COVID-19 in areas outside its tightly regulated quarantine zones, while authorities’ pledges to support the economy also lifted sentiment.

The blue-chip CSI300 index rose 0.8 per cent to 3988.60, while the Shanghai Composite Index gained 1 per cent to 3084.28 points.

The Hang Seng Index rose 2.7 per cent, to 19,898.77, while the China Enterprises Index gained 3.2 per cent, to 6807.03 points.

For the week, the CSI300 index gained 2 per cent, its biggest jump in six weeks, since Shanghai entered a city-wide lockdown. The Shanghai Composite Index climbed the most in three months, up 2.8 per cent.

The Hang Seng Index edged down 0.5 per cent for the week, while the China Enterprises Index was almost flat.

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