ASX set to rise, tech giants weigh on Wall Street

Macy’s fell 6.8 per cent after saying it will likely report revenue for the last three months of 2024 that’s at or slightly below the low end of the $US7.8 billion-$US8 billion ($12.7 billion to $13 billion) forecasted range it earlier gave.

On the winning side of Wall Street were oil-and-gas companies after the price of oil climbed. A barrel of benchmark US crude rose 3.1 per cent to $US78.92 per barrel, while Brent crude climbed 1.7 per cent to $US81.13 per barrel. The Biden administration said Friday it’s expanding sanctions against Russia’s energy industry.

Exxon Mobil gained 2.2 per cent, and Valero Energy jumped 5.4 per cent.

In the bond market, which has been dictating much of Wall Street’s action lately, Treasury yields were ticking higher still.

The yield on the 10-year Treasury rose to 4.78 per cent from 4.76 per cent late on Friday. It’s been climbing relentlessly over the last month, and it was below 3.65 per cent just in September.

The strong reports on the US economy have helped push yields higher. So have worries that tariffs and other policies possibly coming from President-elect Donald Trump will boost inflation along with economic growth.

Loading

A report coming on Wednesday could offer the next spark for the bond market. That’s when the government will deliver the latest monthly update on inflation that US consumers are feeling. Economists expect it to show inflation accelerated a touch to 2.8 per cent in December from 2.7 per cent in November.

“Rates remain the most important variable for equity market direction,” according to Michael Wilson and other strategists at Morgan Stanley.

Outside of the inflation data and its effect on interest rates, this upcoming week will also feature earnings reports from Bank of America, JPMorgan Chase and other big banks. They’re helping to kick off the start of earnings reporting season.

If Treasury yields continue to rise, either stock prices need to fall or companies need to produce bigger profit growth to make up for it.

In stock markets abroad, indexes were mostly lower across Europe and Asia.

Stocks fell 1 per cent in Hong Kong and 0.2 per cent in Shanghai, even though China reported its exports grew at a faster pace in December than expected. Factories were rushing to fill orders to beat higher tariffs that Trump has threatened to impose once he takes office.

AP

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.