Trader Peter Tuchman (center) wears a ‘Dow 22,000’ hat as he works on the floor of the New York Stock Exchange yesterday. A big gain from Apple yesterday morning sent the Dow Jones industrial average above 22,000 for the first time.
Asian technology stocks hit 17-year peaks and Wall Street’s Dow index broke 22,000 points yesterday as blockbuster earnings from Apple rippled out to component makers globally. Shares in the world’s most valuable company surged 6 percent after-hours to a record of more than $159 each, taking its market capitalization above $830 billion.
The Dow blue-chip index rose above the key 22,000 level for the first time after Apple reported better revenues and profits for the past quarter. “US stocks are higher in early action, with the tech sector getting a boost from the betterthan-expected earnings results from Dow member Apple,” said analysts at the Charles Schwab brokerage. It helped dispel one of the few nagging doubts of the corporate earnings season so far-that Amazon’s lacklustre results last week might have revealed some tiredness among the giant US tech and internet stocks that have been driving the stock market rally all year. “It is all about Apple,” said Naeem Aslam chief market analyst at Think Markets. “The firm comfortably topped its forecast and produced stellar numbers for its revenue and profit.”
Among Asia’s Apple suppliers, LG Innnotek jumped 10 percent and SK Hynix, the world’s second-biggest memory chip maker, rose 3.8 percent. Murata Manufacturing firmed 4.9 percent and Taiyo Yuden 4.4 percent, helping Tokyo’s Nikkei up 0.47 percent. The MSCI tech index for Asia also climbed 0.9 percent to ground not trod since early 2000, bringing its gains for the year to a heady 40 percent. Those gains balanced losses in basic materials and energy to leave MSCI’s broadest index of AsiaPacific shares outside Japan steady near its highest since late 2007.
There was a note of caution over reports that US President Donald Trump was close to a decision on how to respond to what he considers China’s unfair trade practices.
Tepid US inflation along with political turmoil in Washington has lessened the possibility of another Federal Reserve rate hike this year, lowering bond yields across the globe. Improving data in other major economies has also served to push the greenback down nearly 11 percent from January peaks, benefiting commodities and emerging markets.
A swathe of manufacturing surveys (PMIs) out on Tuesday had underlined how the improvement in activity had broadened out from the United States to Asia and Europe.
Alan Ruskin, head of G10 forex at Deutsche Bank, noted the top five PMIs were all Northern European economies and every index in Europe was now in expansionary territory above 50. “That will do nothing to hurt ebullient global risk appetite,” said Ruskin. “This phase of the risk rally is based on growth data, but even more on subdued inflation measures.”
MSCI’s gauge of stocks across the globe was just below an all-time peak. On Wall Street later electric car maker Tesla, gadget firm Fitbit and insurance provider AIG will report results.
In currency markets, the dollar index was stuck at just under 93, after touching 92.777, the lowest since early May 2016. It was aided by gains on a softer yen which saw it creep to 110.80.
Yet the euro also benefited from buying against the yen, reaching its highest since February last year. It nudged up against the dollar and Swiss Franc too, briefly striking new 2-1/2-year highs against both at $1.1846 and 1.1468 francs per euro respectively. Euro zone June producer price inflation data helped it on its way as it topped analysts’ forecasts.
There was a slowdown in the pace overall, but it bolstered bets that the European Central Bank could soon start winding down its more than 2-trillion-euro stimulus program. “The ECB is going to be the central bank to watch for the rest of the year,” said JP Morgan Asset Management global market strategist Alex Dryden.
“We think they are going to take 9-12 months to get out of the market but that is a big question ... it could even be six months,” he added.
Bond markets were largely quiet, with the premiums investors demand to hold South European government debt over the German equivalent close to their lowest levels in weeks and both 2- and 10-year US Treasury yields barely budged.
In emerging markets, MSCI’s EM stocks index was near a three-year high. India’s central bank became the first in Asia to cut interest rates this year, while Venezuela’s bonds continued to slid amid rising political tensions there around President Nicolas Maduro.
Oil prices were under pressure again too amid rising US fuel inventories and as major world producers kept pumping, causing investors to worry that several weeks of steady gains had pushed the rally too far. Brent crude eased to $51.80 a barrel, while US crude lost 8 cents to $49.07.
SEOUL: A currency trader gestures at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul yesterday.—