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Morning Research Notes - 08.08.24
Yesterday, the S&P 500 fell as major tech stocks, including Super Micro Computer, NVIDIA, and Apple, suffered significant losses due to disappointing earnings and recession fears. Spot gold decreased by 0.1% to $US2389.25 per ounce. Brent crude rose by 2.6% to $US78.47 per barrel, while iron ore prices fell by 0.4% to $US101.5 per tonne. The VIX index, measuring market volatility, increased by 0.5% to $US27.85.
On Wednesday, the S&P 500 saw a decline, influenced by a drop in Super Micro Computer shares. The Dow Jones and NASDAQ also experienced downturns. Market sentiment was dampened by concerns over AI demand and a lackluster Treasury auction. On the upside, energy stocks gained with rising oil prices, and Shopify enjoyed a boost from strong revenue. Conversely, Walt Disney and Airbnb’s stocks fell after their earnings reports didn’t meet expectations. Despite these market movements, Citi strategists maintain a positive outlook for the S&P 500’s earnings in 2024.
On Wednesday, the Australian markets continued its steady climb from the global sell-off on Monday. The ASX200 closed 0.25% higher. Info Tech, Health Care, and Utilities saw price gains of 0.5%, 0.6%, and 1.05% respectively, while Materials and Financials experienced slight declines of 0.23% and 0.14%. The commodity markets experienced a bearish trend amid continued global volatility, with Aluminum, Copper, Zinc, and Nickel falling by 0.11%, 0.34%, 0.98%, and 0.12% respectively.
In other news, Gaming machines drive Light & Wonder’s revenue growth, Transurban expects higher dividend next year, and Former Qantas boss Joyce to lose more than $9m in bonuses. (Source: AFR)
Chart of the day
Australia’s top 200 companies are projected to experience a 3.5% decline in earnings for the 2023-24 financial year, following a 2.9% drop the previous year. This downturn comes after a period of record-high profits during the COVID-19 pandemic. The upcoming reporting season will be crucial in determining whether these companies’ profits justify their current share prices, which could lead to market volatility. Banks and miners are expected to face significant pressure, while insurance companies are likely to perform well due to their strong pricing power. Analysts have mixed opinions on the resilience of the consumer sector and the overall growth of the market.
Source: abc News
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