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Morning Research Notes - 19.08.24
The S&P 500 closed higher on Friday, achieving its best week of the year as easing economic fears and positive data spurred confidence, with investors continuing to buy into lower prices. Spot gold increased by 0.4% to $US2456.00 per ounce. Brent crude rose by 1.4% to $US81.89 per barrel, while iron ore prices fell by 2.2% to $US93.55 per tonne.
The S&P 500 closed higher on Friday, marking its best week of 2024 as easing economic fears spurred dip buying. The Dow Jones gained 96 points, the S&P 500 rose 0.2%, as the Nasdaq added 0.2%. Positive economic data, including a rebound in consumer sentiment, alleviated economic concerns. Expectations for inflation remained steady, reinforcing confidence in the Federal Reserve’s policies ahead of Chairman Jerome Powell’s upcoming speech at Jackson Hole. In corporate news, Ford recalled 85,000 SUVs, Texas Instruments secured $1.6 billion in CHIPS Act funding, Applied Materials reported strong Q3 results, and Rocket Lab prepared for its first Mars mission.
On Friday, the Australian market experienced a significant downward trend, with the ASX 200 closing 2.16% lower. This trend echoed across all major indices, with Materials, Financials, Info Tech, Health Care, and Utilities closing 1.47%, 2.59%, 2.76%, 1.58%, and 0.06% lower, respectively. Commodity markets also remained bearish, with Aluminum, Copper, Zinc, and Nickel falling by 0.33%, 0.79%, 0.63%, and 1.70%, respectively.
In other news, SkyCity to impair $86.2m in Adelaide, Westpac posts $1.8b in net profit, and Ampol records $235m statutory net profit. (Source: AFR)
Chart of the day
The recent inversion of the US yield curve, where short-term interest rates surpass long-term rates, reflects heightened recession fears amongst investors and economists. An inverted yield curve is often seen as a harbinger of economic downturns. Investors flocking to the safety of long-term bonds drives yields down, leading to an unusual shape that signals a lack of investor confidence in the near-term economic outlook. While this inversion has occasionally given false signals, it has preceded all US recessions over the last 60 years. Its continued inversion suggests that recessionary fears remain strong.
Source: Livewiremarkets
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