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Highlights:
- ASX Futures Rise: ASX 200 futures increased by 11 points (+0.13%) at 8:30 am AEDT, indicating a potential positive start for the local market.
- US Market Breadth Turns Bullish: Equal-weight S&P 500 gained 0.79%, outperforming the official S&P 500 index, which dipped 0.21%.
- Economic Data in Focus: Key data releases from China, including GDP, retail sales, and industrial production, expected this afternoon.
ASX 200 futures signal a modest upward movement, reflecting global market dynamics. Despite a mixed overnight session in the US, broader market trends and strong earnings from technology firms have injected optimism. The Equal-weight S&P 500 index outpaced its official counterpart by a substantial margin, underscoring improved breadth in US equities.
US Market Recap
Major US benchmarks experienced a choppy session, with the S&P 500 and Nasdaq struggling to extend gains from their previous rally. Despite minor losses, breadth remained robust, with the Equal-weight S&P 500 advancing 0.79%, a stark contrast to the 0.21% decline in the official index. Key developments include:
Economic Indicators: US retail sales softened, while the Philly Fed Manufacturing Index posted robust gains. Additionally, US import and export prices registered increases, reflecting complex economic dynamics. Technology Sector Highlights: Taiwan Semiconductor Manufacturing Company (TSMC) delivered strong earnings, reigniting enthusiasm around artificial intelligence-related themes. European Luxury Sector Recovery: Cartier's earnings exceeded expectations, indicating a resurgence in consumer demand within the European luxury market. CPI and PPI Trends: While December's consumer and producer price indices were well-received, uncertainty persists over disinflation trends due to elevated ISM Services prices.
Key Events to Monitor
Today's market movements will be influenced by both domestic and international developments. In particular, the following are noteworthy:
China's Economic Data: GDP, retail sales, fixed asset investment, and industrial production figures are expected to shed light on the strength of the Chinese economy. These metrics could significantly impact sentiment across Asia-Pacific markets, including the ASX. US Dollar and Bond Yields: Slightly weaker bond yields and a softer US dollar provide a supportive backdrop for Australian equities. Broader Economic Environment: With a barrage of data released overnight, market participants remain cautious about global growth prospects and geopolitical risks, including cross-border M&A challenges.
Broker Updates
Several notable broker moves have been reported:
Genesis Minerals (ASX:GMD): UBS downgraded the stock to Neutral but raised the price target to $3.00 from $2.80. Northern Star Resources (ASX:NST): Jarden upgraded the stock to Neutral from Underweight, increasing the target price to $15.80 from $13.10. ResMed (ASX:RMD): Goldman Sachs initiated coverage with a Buy rating and a target price of $48.90.
The ASX 200's trajectory will hinge on the interplay of international and local factors, with investors closely watching Chinese economic data and global market sentiment. For continued updates on the latest financial trends and insights, stay tuned.
