ASX futures were up 46 points or 0.64% to 7177 at 7.00am Thursday AEST to reflect a gain at the open. Americans’ increasing optimism buoyed U.S. stocks on Wednesday.

The S&P 500 gained 1.4 percent, and all 11 of its sectors ended higher. The Dow Jones Industrial Average rose 1.5 percent, or nearly 500 points, and the tech-centered Nasdaq Composite also gained 1.5 percent. Early gains amplified the impact of consumer confidence data that surged in December to its highest level since April. Sentiment about the economy and labor market improved, and expectations for inflation over the next year fell to 6.7 percent, the lowest in more than a year.

There was also mixed housing market data. Sales of previously owned homes declined for a 10th consecutive month in November to the longest slide on record. But with home prices, which have been a drag on activity, falling for the fifth consecutive month since reaching a peak in June. The combination of a more confident shopper and falling prices and expectations for prices — are probably welcome developments for Federal Reserve officials, who are extending themselves to control inflation without sparking a recession.

In commodity markets, Brent crude climbed 2.99% to $US 82.38 a barrel, and gold lost 0.21% to US$1,814.14. In bond markets, the yield on Australian 2 Year government bonds traded at 3.18% while the 10 Year was steady at 3.72%. On the overseas front also, yield on 2-Year US Treasury notes slipped to 4.22% and yield on 10-Year US Treasury notes decreased to 3.68%.

The Australian dollar was at 67.03 US cents against its previous close of 66.76. The WSJ Dollar Index, which measures the U.S. currency against 16 others, rose to 97.26.

Asia

Chinese stocks ended with small losses after reversing morning gains as sentiment continued to be weak on the back of the grim economic imagery painted by big Covid outbreaks post-chaotic reopening. While there is no lockdown across the country now, market participants and business owners are grappling with uncertainty after years of repeating a stop-and-go in economic activities, Robin Xing, chief China economist at Morgan Stanley, wrote in an open column on Wednesday. Chip makers and car manufacturers were among the small number of decliners on the market, with Semiconductor Manufacturing International Corp. down 1.3% and Great Wall Motor falling 1.8%. Food services and financial shares were among the market's best performers. Ping An Insurance rose 1.0% and Xi’an Catering rose 10%. The Shanghai Composite Index retreated 0.2% to 3068.41. The Shenzhen Composite Index fell 0.5 percent, and the ChiNext Price Index declined 0.3 percent.

Stocks in Hong Kong rose slightly as traders continued to feel out the market’s long-term optimism around China’s reopening after a small decline on Tuesday. The benchmark Hang Seng Index ended 2008 up 0.3% at 19160.49. Volume of trading was light ahead of year-end holidays. The health care segment as well as some automakers were among the biggest gainers, with Alibaba Health increasing 2.1%, and XPeng gaining 4.7%. The tech surge was tempered by some developers; the Hang Seng Tech Index added 0.7% while the Hang Seng Mainland Properties Index lost 0.2%. The real estate developers Country Garden, China’s largest, fell 1.5% and CIFI Holdings lost 0.9%.

Japanese shares suffered losses on the day, led lower by auto and real estate shares, on concerns over rising borrowing costs after the Bank of Japan changed its course to loosen its yield control. The yield on the 10-year Japanese government bond increased to 0.480% from 0.410%, its highest level since July 2015. Automaker Subaru fell 3.7% and property developer Mitsui Fudosan declined 3.8%. The Nikkei Stock Average dropped 0.7% to 26387.72.

Europe

European stocks made strong advances and Wall Street was up overwhelmingly on healthy US corporate and economic news. The pan-European Stoxx Europe 600, the British FTSE 100, and the German DAX all rose more than 1 percent, and the French CAC 40 was up 2 percent.

“With the US markets having narrowly closed up in the green on Tuesday, US markets have taken their cues from a positive European session on Wednesday and the reaction to last night’s numbers from Nike and FedEx, and opened strongly higher,” CMC Markets analyst Michael Hewson wrote. “We’ve also got a strong US consumer confidence number for December coming in the best since April this year, which will have helped nudge yields that little bit lower.”

North America

Consumer sentiment healed helped drive U.S. stocks higher on Wednesday. The S&P 500 gained 1.4 percent, as each of its 11 sectors advanced. The Dow Jones Industrial Average rose 1.5 percent, or roughly 500 points, and the tech-heavy Nasdaq Composite gained 1.5 percent, too. An early advance picked up speed after a report showed a surge in consumer confidence in December to its highest level since April. Household sentiment on the economy and labor market rose, though inflation expectations over the upcoming year fell to 6.7%, the lowest in over a year.

Data on the housing market offered a mixed picture. Sales of existing homes dropped for a 10th consecutive month in November to mark the longest slide on record. But home prices which have been a drag on activity fell for the fifth consecutive month, after hitting a high in June. Some analysts said that the constellation of a more confident consumer and falling prices — as well as expectations of prices is probably welcome news for Federal Reserve officials, who are trying to cool inflation without going too far and causing a deep recession.

The climb on Wednesday was a rebound from recent declines fed by fears that increasing rates will lead to an economic slowdown. The Bank of Japan’s tweak to its yield curve control policy had stoked fears of a lack of liquidity in global markets as well. Investors continue to fret about the course of inflation and Fed policy, given that higher rates hammered markets in 2022, sending stocks and bonds into deep losses.

Among individual shares, Nike gained 13% after raising its revenue forecast and topping Wall Street’s estimates, heading for the retailer’s strongest day in 1.5 years. FedEx climbed 4 percent after it posted earnings that fell due to a drop in global trade, but not as much as analysts had forecast. Crypto miners were some of the stocks who were hit hardest, particularly following Core Scientific’s bankruptcy filing. Rite Aid shares slumped 16% after a demand drop-off for Covid-19 vaccinations and testing took a bite out of the drugstore operator’s outlook.