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Wall Street gains as rate cut optimism fuels a shortened session

ASR Team

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Morning Research Notes - 04.07.24


US equities closed broadly higher overnight, as rate cut optimism fueled an Independence Day shortened session. Brent (oil) traded 0.8% higher, with the current price per barrel sitting at $86.89. Spot gold gained 1.2%, with the current price per ounce standing at $2356.27. Volatility, as measured by the VIX index, increased by 0.5% to $12.09.

On Wednesday, the S&P 500 closed at a record high of 5,534.63, up 0.5%, in a holiday-shortened session driven by weaker economic data that fueled hopes for imminent rate cuts. Despite a 0.1% drop in the Dow Jones Industrial Average, the Nasdaq surged 0.8% to a new record. Market optimism was bolstered by Federal Reserve Chair Jerome Powell's comments on cooling inflation, while disappointing factory orders and services activity data furthered rate cut expectations. Paramount Global's stock soared over 11% following news of a potential sale to Skydance Media, whereas Constellation Brands dropped more than 3% due to underwhelming Q1 sales. Energy stocks rose on the back of a significant reduction in U.S. crude inventories. Additionally, President Biden is reportedly contemplating withdrawing from the presidential race, with Vice President Kamala Harris as a potential successor.

The ASX 200 increased by 0.28% on Wednesday, with Materials (1.11%), Info Tech (1.37%) and Health Care (0.52%) closing higher, whereas Utilities (-0.55%) and Financials (-0.36%) closed lower. Commodity markets ended the day broadly higher, with Zinc (1.46%), Iron ore (3.1%) and Copper (0.80%) seeing gains, whilst Aluminium (-0.10%) and Nickel (-0.44%) experienced losses.

In other news, Aramco, Adnoc are considering bids for Santos, Magellan flags $19m in performance fees, flat inflows, and Regal Partners flags $55m in performance fees. (Source: AFR)


Chart of the day

​​​​​​Today's chart shows the latest UK election polling going into tomorrow's election. On current data, it appears that the Labour Party is on course to win a significant parliamentary majority, with close to 39% of the national vote, with the incumbent Conservative Party set to face one of its greatest electoral defeats on record. It will be interesting to see, how this victory materialises and how British economic and foreign policy will shift under a centre-left government.


Source: The Economist

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