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Morning Research Notes - 21.08.24
On Tuesday, the Dow Jones Industrial Average reached a record high, driven by strong consumer confidence and anticipation of Nvidia’s upcoming earnings report. Spot gold increased by 0.1% to $US2520.03 per ounce, Brent crude fell by 2.2% to $US79.68 per barrel, and iron ore prices rose by 1.4% to $US101.70 per tonne.
On Tuesday, the Dow Jones Industrial Average closed at a record high of 41,250.50 points. Investors are awaiting Nvidia’s quarterly earnings report, which is expected to provide insights into the future of the AI-driven tech rally. Apple saw limited gains due to the upcoming departure of its CFO, while Netflix’s stock rose after a price target upgrade. Additionally, U.S. consumer confidence hit a six-month high in August, as fears about a recession subsided, according to the Conference Board.
On Tuesday, the Australian markets experienced a bearish trend, with the ASX200 closing 0.17% lower. This downward trend was reflected across most indices: Financials, Info Tech, and Health Care saw price declines of 0.86%, 1.33%, and 0.16% respectively. However, Materials and Utilities experienced slight increases of 0.80% and 0.24%. The commodity markets reopened positively after the bank holiday that closed the London Metals Exchange on Monday, with Aluminum, Copper, Zinc, and Nickel gaining by 0.84%, 1.93%, 1.53%, and 2.59% respectively.
Chart of the day
Australian equities, represented by the All Ordinaries and S&P/ASX 200 indexes, have historically underperformed compared to the S&P 500 Index due to high dividend payouts and limited earnings retention. However, with low debt-to-equity ratios and favorable CAPE ratios, Australian stocks are poised for potential outperformance. Analysts suggest that the stability of Australian companies, combined with the possibility of mean reversion, could make them a promising investment compared to their higher-risk American counterparts.
Source: McKinsey & Company
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