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Morning Research Notes - 23.08.24
On Thursday, the S&P 500 fell by 1.1% to 4,452.69, driven lower by rising Treasury yields and investor apprehension before Federal Reserve Chair Jerome Powell's upcoming speech at the Jackson Hole Economic Symposium. Meanwhile, commodity prices showed mixed movements: spot gold declined by 1.2% to $2,483.35 per ounce. Brent crude oil rose by 1.5% to $77.19 per barrel, and iron ore prices dropped by 1.1% to $97.35 per tonne.
On Thursday, the S&P 500 fell by 1.1%, as investor concerns over rising Treasury yields influenced the market. The 10-year Treasury yield climbed to 4.38%, signaling increased borrowing costs and amplifying anxiety about future Federal Reserve policies. With Federal Reserve Chair Jerome Powell set to speak at the Jackson Hole Economic Symposium, market participants are wary of potential insights into future interest rate decisions and their impact on inflation. This backdrop of rising yields and uncertainty contributed to the day's decline in the stock market.
The Australian market extended its bullish trend from Monday, with the ASX 200 closing 0.21% higher. The day's performance was mixed across indices: Materials and Information Technology sectors rose by 0.41% and 1.88%, respectively, while Financials, Healthcare, and Utilities experienced declines of 0.28%, 0.06%, and 0.52%. Commodity markets also experienced a mixed day, aluminum and zinc prices increased by 1.15% and 1.09%, respectively, while copper and nickel saw slight declines of 0.84% and 1.86%.
In other news, Inghams warns on poultry volumes, Jumbo Interactive lifts sales, dividends jump, and Namoi Cotton expects steady profit despite rain, energy costs. (Source: AFR)
Chart of the day
Advanced economies are facing tight labour markets, with job vacancies outpacing available talent. For instance, in the U.S., there were about 10.4 million job openings in early 2024, while the unemployment rate remained low at 3.7%. Skill mismatches are particularly pronounced, with 60% of employers struggling to find workers with the right qualifications. This situation is driving wages up, with average hourly earnings rising by 4.5% over the past year. To address these challenges, there is a pressing need for policies that close skills gaps, increase workforce participation, and improve labour market flexibility, or economies may struggle to maintain growth and productivity.
Source: McKinsey & Company
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