Nasdaq hits fresh five-month high, Fed less hawkish than expected, ASX to rise

ASX 200 futures are trading 23 points higher, up 0.30% as of 8:25 am AEDT.

Powell says inflation has eased somewhat but remains elevated, S&P 500 rallies to a fresh six month high, AMD posts a double beat but flags elevated levels of inventory among cloud customers, Snapchat misses earnings and flags that advertising demand "hasn't really improved", gold prices hit another key milestone and JPMorgan's reporting season preview.

Let's dive in.

Fed Rundown: Cautiously dovish

Fed Rundown and Reporting Season Preview was written by Hans Lee.

Here are some Powell highlights from the rate hike and presser:

• On inflation: “Very premature” to declare victory against the war on inflation. He argues that while goods inflation is coming down, a measure of services inflation which excludes volatile items (food and energy and housing) is still persistently above target
• A pause: Not something on the minds of policymakers at the moment. He said he has no desire to overtighten or what rate range is “restrictive enough” - a risk he described as “very difficult” to manage
• The debt ceiling: No one should assume the Fed can protect the country if the US defaults. There's only one way forward and that's for Congress to raise it

So how did the market feel about this? Chicken! Stocks soared and bonds were bought across the curve. As of right now, rates traders are pricing in another 25 basis points hike in March. From there, who knows.

Talking Technicals

Regardless of whether or not Powell's speech was hawkish or dovish, the market's already made up its mind. The S&P 500 has moved out to a six month high, now convincingly above that longstanding trendline.

Having cleared the trendline, the 200-day moving average and set a higher high, does this reflect a true change of character for markets?

The ASX 200 is set to receive a kick, with futures expecting a +0.39% open. That puts us less than 1.5% away from all-time highs. How crazy is that?

Sectors to watch

Tech: Big risk-on session with the Nasdaq up 2.0% and the ARK ETF up 4.4%. Our overnight ETF list also showing 3-5% gains for sectors like semis, fintech, cloud and cybersecurity. The ASX 200 Info Tech sector has been on a two day losing streak, so this could bring some strength back to growth-y pockets of the market. Though, its worth noting that Meta just posted a massive earnings miss after hours.

Gold: Gold spot prices rallied 1.2% to a nine month high of US$1,951/oz. Powell's speech triggered a sharp decline for the US dollar and bond yields. This could see some follow through for local gold miners. Although its worth noting that not all gold miners are made equal. Amid the recent breather for gold, you have names like Perseus Mining (ASX: PRU) and Evolution Mining (ASX: EVN) tumble; Newcrest Mining (ASX: NCM) hold up relatively well and Northern Star (ASX: NST) act as though there was no pullback at all.

Energy: Energy was the worst performing and only negative sector on the S&P 500, down -1.9%. Oil prices fell more than 2% after the EIA reported a larger-than-expected build in US crude stockpiles. Woodside (ASX: WDS) was already under pressure on Wednesday, down -1.4%.

Uranium: The Global X Uranium ETF was up 2.0% to a fresh four month high overnight.

Lithium: VanEck Rare Earth/Strategic Metals ETF adds 2.3% overnight and trying to push above the trendline. Local lithium names have been aggressively sold off in the past few sessions. Can we see the dust settle?

Reporting Season Preview

UBS released its top small cap reporting season picks. If you missed it, you can read all about it here.

Today, we’re introducing you to JPMorgan’s reporting season preview. They've introduced it through a matrix of expectations. It’s not about who they want to see outperform but what they will need to see from respective companies to see any share price upside. The discretionary analysis is then coupled with the equity analysts’ own expectation of share price risk on earnings day.