Macro update
Wall Street edges higher:
US equities finished with modest gains, with the Dow Jones up 0.07%, the S&P 500 adding 0.1% and the Nasdaq 100 rising 0.14%, recovering from earlier losses in a still-volatile session.
Tech rebounds but software lags:
The S&P 500 technology sector ended 0.5% higher, supported by NVIDIA and Apple, while software stocks fell 1.6% as concerns persisted over artificial intelligence (AI) disruption and rising competition from China’s Alibaba.
Financials lift, staples weigh:
Banks including Goldman Sachs and JPMorgan helped push financials higher, while consumer staples dropped 1.5% as General Mills slid 7% after cutting its full-year outlook.
Asia steadies despite AI uncertainty:
Japan’s Nikkei 225 gained 1.4% and Australia’s ASX 200 rose 0.5%, while US futures pointed slightly higher as investors weighed AI risks and awaited minutes from the Federal Reserve’s (Fed) January meeting.
Dollar firms, kiwi slips on RBNZ signal:
The US dollar index edged up as markets tracked US–Iran nuclear talks and Ukraine peace discussions, while the New Zealand dollar fell around 0.8% after the RBNZ held rates at 2.25% and signalled policy would remain accommodative for some time.
UK inflation cools further:
Headline consumer price index (CPI) eased to 3% in January from 3.4% in December – its lowest in 10 months – strengthening the case for a Bank of England (BoE) cut in March or April after unemployment rose to a five-year high.
Dow Jones recovers
The Dow Jones Industrial Average is seen bouncing off last week’s low at 49,084 and is expected to try and break through its 7 to 22 January highs at 49,607 – 49,633. If overcome, the early February high at 49,653 may also be reached.
Further up sits the 9 February low at 49,837 which may act as resistance.
Short-term outlook:
Bullish while above 49,084.
Medium-term outlook:
Bullish while above the 20 January low at 48,428, targeting the 50,600 region.