The American stock markets opened lower but rebounded to close above the flatline. Tuesday’s trading was marked by news from Ukraine, where Ukraine attacked Russian territory with American long-range missiles, prompting Russia to relax its demands in its nuclear doctrine. This escalation caused defense stocks to rise, while investors sought safer assets such as gold. Additionally, the healthcare sector was weighed down by the newly elected president, Donald Trump, appointing Robert F. Kennedy as health minister, who is a well-known vaccine skeptic. Among individual stocks, there were significant movements in Super Micro Computer, which had been declining due to Ernst & Young withdrawing as the auditing firm to avoid association with financial reporting issues. BDO USA is reportedly taking over, leading the stock to surge over 30 percent. The broad S&P 500 index rose 0.4 percent, while the industrial Dow Jones index traded down 0.3 percent, and the tech-heavy Nasdaq was up 1.0 percent.
Commodities climbed across the board yesterday, with oil seeing modest gains after the partial restoration of crude oil production at the Norwegian Johan Sverdrup field following Monday’s power outage that led to an increase in oil prices. Additionally, the strengthening US dollar, currently at a one-year high, made commodities more expensive for buyers using other currencies. WTI crude oil increased by 0.2 dollars to $69.3 per barrel, while Brent crude oil traded up 0.1 dollars to $73.4 per barrel.
Base metals rose overall, with aluminum being the day’s winner, climbing 1.3 percent, followed by nickel up 0.5 percent, and copper and lead both increasing by 0.3 percent. Zinc traded up 0.1 percent, while tin was the day’s loser, falling 0.4 percent. Gold continued to rise yesterday following Monday’s sharp increase due to the deteriorating security situation in Ukraine after the American long-range missile attack on Russian territory. This event increased demand for the metal, considered a safe asset during geopolitical unrest. The Federal Reserve is also expected to cut interest rates by 25 basis points in December, making the yield-free metal attractive as the gold price benefits from a low-rate environment. Gold rose by 17.8 dollars to $2,629.3 per ounce.
In the US stock market, reporting Walmart surged by 3.0 percent after third-quarter sales and earnings per share exceeded expectations, while Nvidia rose by 4.9 percent in anticipation of today’s quarterly report. SMCI also surged yesterday by 31.3 percent after appointing BDO USA as the auditing firm and presenting a plan to Nasdaq to avoid delisting. Vaccine manufacturer Biontech ended the day up by 6.4 percent, and electric car maker Tesla rose by 2.1 percent, while tax accounting firms H&R Block and Intuit dropped by 8.2 and 5.1 percent, respectively.
The US ten-year Treasury bond fell by 1 basis point to 4.40 percent.
Asian markets started Wednesday with mixed trading, with Japan reporting its trade balance and exports early in the morning Swedish time. In China, the one-year and five-year benchmark interest rates remained unchanged at 3.1 and 3.6 percent, respectively. Overall, investors worldwide are awaiting Nvidia’s quarterly report, which will be released after the market closes today. The results are expected to impact the entire market and drive sentiment within the tech sector for the rest of the year, according to Bloomberg. At 07:45, the Japanese Nikkei 225 index was down 0.3 percent, while the Chinese Shanghai index traded up 0.4 percent, and the Hang Seng was up by 0.2 percent.
On the Stockholm Stock Exchange, the reporting front is quiet on Wednesday morning, with reports from Eolus Vind, Mysafety, and Soltech Energy expected later in the day.
Among today’s new recommendations, UBS has raised its recommendation for Astra Zeneca from sell to neutral and raised the target price to 1,567 kronor. Bioarctic also received a target price raise to 340 kronor (from 290) by RBC, which reiterated an outperform rating, while Morgan Stanley lowered its target price for Getinge to 194 kronor (from 228) and reiterated a neutral recommendation. Carnegie lowered its target price for Synsam to 59 kronor (from 62) while reiterating a buy rating.
On the macroeconomic front, Wednesday is a calm day starting in Japan at 00:50, where the Ministry of Finance reported a trade balance of minus 461.2 billion for October and exports increased by 3.1 percent. The People’s Bank of China announced at 02:00 that the one-year and five-year lending rates for November were set at 3.1 and 3.6 percent, respectively. In Europe, the Office for National Statistics will report the UK’s consumer price index for October and on an annual basis at 08:00, while Destatis will report Germany’s producer price index for October. The day ends in the US at 16:30 when the Energy Information Administration announces the weekly crude oil inventories. Notable speeches include ECB President Lagarde at 14:00, Bank of England member Ramsden at 17:00, Fed member Cook at 17:00, and FOMC member Barkin at 18:15.