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Morning Research Notes - 12.08.24
Amidst recession concerns and currency adjustments, the S&P 500 rebounded, closing higher by 0.47% on Friday. The market received a boost following better than expected service sector growth. Spot gold saw an increase of 0.2% to $US2431.32 per ounce. Brent crude rose by 0.7% to $US79.73 per barrel, while iron ore prices surged by 1.5% to $US100.90 per tonne. Overall, market sentiment remains cautious in anticipation of potential rate cuts by the Federal Reserve.
The S&P 500 experienced a rebound, closing higher on Friday, remaining relatively stable for the week, despite a significant drop on Monday due to recession concerns and the unwinding of yen-funded carry trades. The technology sector contributed the most to the index's recovery, while the Cboe Volatility Index, which had spiked earlier in the week, declined. A disappointing July jobs report and subsequent adjustments in currency positions influenced the market's earlier volatility. Federal Reserve officials indicated a potential for upcoming rate cuts based on cooling inflation, with the market anticipating the next Fed meeting for further direction. Overall, the major indexes showed mixed weekly results, with the S&P 500 slightly down, while the Dow and Nasdaq also saw declines. Market sentiment remains cautious, with traders debating the extent of the Fed's likely rate cuts in their upcoming September meeting.
On Friday, the Australian markets experienced a bullish incline. The ASX200 closed 1.23% higher. The bullish trend reflected in all major indices. Materials, Financials, Info Tech, Healthcare and Utilities saw price gains of 1.86%, 0.77%, 3.08%, 1.03%, and 0.68% respectively. The commodity markets also remained resilient amidst global volatility. Aluminum, Copper, Zinc and Nickel all enjoyed price gains of 2.65%, 1.8%, 4.53% and 0.53%.
In other news, CAR Group revenue jumps 41pc, Fletcher sells Tradelink for $170m, and Beach Energy plunges into bottom-line loss. (Source: AFR)
Chart of the day
In the dynamic landscape of investment, income investors are increasingly advised to consider stocks and bonds over cash holdings. The rationale behind this shift is multifaceted. Firstly, the potential for higher returns: stocks and bonds have historically outperformed cash in terms of long-term growth. Secondly, inflation concerns: cash savings can be eroded by inflation, whereas stocks and bonds offer the potential for inflation-beating returns. Lastly, diversification benefits: a mix of stocks and bonds can help spread risk and provide a more stable income stream. As the investment environment evolves, these factors make a compelling case for income investors to look beyond cash to stocks and bonds for better yield opportunities and portfolio resilience.
Source: Livewire
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