ASX records sluggish gains amid dips from mining, energy sectors

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Trump has promised sweeping moves to reshape global trade and the economy, often at the expense of other countries, but most stock indexes in Asia and Europe made only modest moves. In the bond market, US Treasury yields gave back some of their big recent gains that had cranked up the pressure on stock markets worldwide, while bitcoin pulled back from its record set the day before.

In the foreign-currency market, the values of both the Mexican peso and Canadian dollar fell against the US dollar after Trump said he expects to put 25 per cent tariffs on Canada and Mexico starting on February 1. Trump had threatened even stiffer tariffs on Chinese imports during his campaign, but he said Monday he wanted to have more discussions with the leader of the world’s second-largest economy.

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The threat of widespread tariffs, along with the possibility of other policies that could swell the US government’s debt, had helped send Treasury yields higher recently, which in turn knocked down stock prices. To make up for such downward pressure, companies need to deliver stronger earnings growth to support their stock prices.

Charles Schwab did just that on Tuesday and rose 5.9 per cent after delivering a better profit report for the end of 2024 than analysts expected. It credited clients pouring more in dollars, as its total client assets rose 19 per cent from a year earlier to $US10.1 trillion ($16.1 trillion).

This earnings reporting season is still in its early days, but S&P 500 companies have so far been beating analysts’ expectations for earnings by double the rate they were doing at this time three months ago, according to Bank of America strategists Ohsung Kwon and Savita Subramanian.

Moderna also rose 5.4 per cent after saying it received $US590 million in total awards from the US government for the continued development of flu vaccines. Oracle rallied 7.2 per cent ahead of an expected announcement by Trump on investments in artificial-intelligence infrastructure involving the tech giant, OpenAI and SoftBank.

Such gains helped offset a 9.2 per cent drop for Walgreen Boots Alliance. The US Justice Department accused Walgreens late Friday of filling millions of prescriptions without a legitimate purpose, including for dangerous amounts of opioids. In the lawsuit, the government says the drugstore chain’s pharmacists filled controlled substance prescriptions with clear red flags that indicated they were highly likely to be unlawful.

Walgreens, one of the country’s largest pharmacy chains with over 8,000 locations, said in a statement that it stands behind its pharmacists and “will not stand by and allow the government to put our pharmacists in a no-win situation, trying to comply with “rules” that simply do not exist.”

In the bond market, Treasury yields eased to give back some of the big gains they’d made in recent months on worries about inflation remaining difficult to fully subdue.

The yield on the 10-year Treasury fell to 4.56 per cent from 4.62 per cent late Friday. Like the US stock market, bond trading had been closed on Monday in observance of Martin Luther King Jr. Day.

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The 10-year Treasury yield has been regressing since an encouraging update on inflation last week, but it’s still well above where it was in September, when it was below 3.65 per cent.

In stock markets abroad, indexes rose slightly across Europe after finishing mixed in Asia.

Hong Kong’s Hang Seng index rose 0.9 per cent after embattled Chinese property developer Country Garden got a reprieve on its deadline for working out an agreement with its creditors.

In the cryptocurrency market, which has surged amid hopes Trump will make Washington friendlier to the industry, bitcoin pulled back from its record above $US109,000 set on Monday and was sitting just above $US106,000.

With AP

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

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