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Morning Research Notes - 14.08.24
Yesterday, the U.S. stock market experienced a significant rally due to cooling inflation, sparking hopes for an imminent Federal Reserve rate cut. The notion failed to echo through to major commodities. Spot gold decreased by 0.2% to $US2466.9 per ounce. Brent crude fell by 1.9% to $US80.78 per barrel, while iron ore prices fell by 0.9% to $US98.45 per tonne.
The U.S. stock market saw a significant rally on Tuesday, driven by signs of cooling inflation, which bolstered hopes for a Federal Reserve rate cut as early as next month. The Dow Jones Industrial Average rose by 389 points (1%), the S&P 500 gained 1.5%, and the NASDAQ Composite climbed 2.3%. The producer price index (PPI) for July increased by only 0.1%, lower than the expected 0.2%, and core PPI remained flat. This data strengthened the case for a rate cut, with Treasury yields falling sharply. Tuesday also featured notable stock movements which included Home Depot rising despite a guidance cut, Starbucks jumping 23% after a CEO change, and Dell gaining 5% following a price upgrade from Barclays.
On Tuesday, the australian market continued its steady climb leading the ASX 200 to close 0.17% higher. Materials, Financials and Info Tech saw price gains of 0.27%, 0.94%, and 0.43% respectively, while Health Care and Utilities experienced slight declines of 2.87% and 0.34%. The commodity markets exhibited a bearish trend, with Aluminum, Copper, and Zinc all falling in prices by 0.51%, 0.21%, and 2.84%, respectively. Contrastingly, Nickel prices appreciated by 0.25%.
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Gold miner’s profits nearly triple, Pro Medicus posts $82.8m net profit, and Amotiv profit rises, ups dividend. (Source: AFR)
Chart of the day
In the realm of small and microcap companies, there are potential gems that can offer substantial growth for discerning investors. These companies, while susceptible to market volatility and economic conditions, can be undervalued due to market fears rather than their fundamentals. However, the key to capitalising on these opportunities lies in the ability to identify quality businesses that have been undervalued. This requires a strategic approach that combines a value strategy with a quality overlay, which can lead to superior returns.
Source: Livewiremarkets
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