Australian shares set for gains after Wall Street record
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The news: The Australian sharemarket is set to start the new week on a firm footing after two of the three major US indices notched up record closing highs on Friday.
The numbers: The Dow Jones index rose 1.05% to a new record close on Friday, as did the broader S&P 500 by gaining 1.23% by the end of the session. The tech-heavy Nasdaq jumped 1.7%. In the local market, ASX 200 futures were trading 26 points or 0.35% higher at 7418 points at 7:00am AEDT on Monday.
The context: The gains on Wall Street were fueled by chipmakers surging on AI optimism and investor bets that the Federal Reserve will cut interest rates in 2024. Shares in chipmakers Nvidia and Advanced Micro Devices rallied after server maker Super Micro Computer lifted its second-quarter profit forecast. Taiwan Semiconductor Manufacturing Company, the world's largest contract chipmaker, earlier in the week said it saw booming demand for high-end chips used in AI. Investors were also cheered by a survey showing consumer sentiment improved in January but companies reporting quarterly results over the next few weeks could hold the key.
What they said: "This new record level of the S&P 500 is sustainable as long as earnings meet expectations," Steve Sosnick, Chief Strategist at Interactive Brokers told Reuters.
"If, on the other hand, we find out that the market has either gotten ahead of itself ... or we get guidance from some of these companies that doesn't match the bullish sentiment that's being priced into them, that can be a real risk.”
The source: Reuters
