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Morning Research Notes - 14.08.24
Wall Street stocks exhibited mixed performance on Monday, with the Dow Jones falling while the S&P 500 and Nasdaq Composite Index closed higher, reflecting the investors’ varied responses to the upcoming U.S. economic data. The price of spot gold saw an increase of 1.7%, reaching $US2471.74 per ounce at 4:20pm in New York. Meanwhile, Brent crude experienced a rise of 2.8%, with its price climbing to $US81.90 per barrel. Contrarily, the price of iron ore fell by 2.1%, settling at $US99.00 per tonne.
On Monday, Wall Street stocks closed mixed. The Dow Jones Industrial Average fell, while the S&P 500 and Nasdaq Composite Index ended the day higher. The Russell 2000 Index, which focuses on small companies, saw a drop of 0.9%. In individual stocks, Starbucks saw a rise of 2.58% on reports that activist investor Starboard Value, is pushing for steps to improve its stock price. Investors are closely watching a range of U.S. economic data, especially CPI data, to understand the potential direction of Federal Reserve monetary policy.
The ASX closed 0.46% higher as investor confidence builds up in the domestic market. The notion was exemplified in most major indices with Financials, Info Tech, Health Care and Utilities all gaining 0.86%, 1.93%, 034%, 0.55% respectively. Contrastingly, Materials fell by -0.56%. The bullish trend continued on to commodities with Aluminum Copper and Zinc gaining 0.22%, 0.52% and 0.63% while Nickel dropped by -0.96%.
In other news, CSL net profit up 20pc; sticks with growth target, Region books $17m in net profit, and Seek suffers 13pc earnings drop, cuts dividend. (Source: AFR)
Chart of the day
The economic landscape of the United States is showing worrying signs, with a potential recession looming on the horizon. Historical data suggests that a rise in the unemployment rate is often a precursor to an economic downturn, and current trends indicate an increase in joblessness. Consumer spending growth has decelerated significantly from its post-pandemic peak, and household savings are no longer providing the buffer they once did, leading to reduced spending power across the population. This decline in spending is reflected in the revenue reports of major corporations, with notable names like McDonald's, Starbucks, and Mondelez International reporting downturns in growth. The stability of the labour market is critical in determining the trajectory of the economy, and with the current indicators, the risk of a recession within the next year appears to be more likely than not. The situation calls for close monitoring of consumer behavior and employment trends to gauge the potential impact on the economy's health.
Source: Livewire
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