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Morning Research Notes - 09.07.24
US equities broadly gained on Monday, with investors relatively optimistic ahead of Powell's testimony later in the week. Brent (oil) traded 1.1% lower, with the current price per barrel sitting at $85.61. Spot gold also fell 1.4%, with the current price per ounce standing at $2357.84. Volatility, as measured by the VIX index, decreased by 0.9% to $12.37.
On Monday, the S&P 500 extended its record run, closing at all-time highs for a fourth consecutive session, despite cautious sentiment ahead of Federal Reserve Chair Jerome Powell's testimony to Congress and key inflation data later in the week. The S&P 500 climbed 0.06% to a new closing record of 5,570.73, while the NASDAQ Composite rose 0.2% to its own record close; however, the Dow Jones Industrial Average fell by 31 points, or 0.1%. Powell is expected to focus on monetary policy during his testimony, with recent labor data suggesting a cooling jobs market, fueling speculation about potential interest rate cuts.
The consumer price index data due on Thursday will be a critical factor in the Fed's rate decisions. This week also marks the beginning of the second-quarter earnings season, with major banks and companies like JPMorgan Chase, Wells Fargo, Citigroup, PepsiCo, and Delta Air Lines set to report. Paramount Global saw a stock drop after its merger with Skydance Media, Boeing agreed to plead guilty in a criminal fraud case, and Corning Incorporated raised its Q2 sales forecast, boosting its shares to a 52-week high.
The ASX 200 decreased by 0.76% on Monday, with Materials (-1.81%), Financials (-0.29%), Utilities (-0.73%) and Health Care (-1.04%) closing lower, whereas Info Tech (0.29%) closed higher. Commodity markets ended the day broadly lower, with Zinc (-0.98%), Copper (-0.01%), Aluminium (-0.80%), Nickel (1.33%) and Iron ore (-1.5%) all experiencing losses.
In other news, Bapcor rejects Bain Capital’s $1.83b buyout offer, Bapcor appoints 7-Eleven local chief as new CEO, Telstra increases mobile plan prices. (Source: AFR)
Chart of the day
Today's chart shows year-on-year earnings growth by sector of the S&P 500. In the past year, it appears that communication services have exhibited the greatest earnings growth (+18.4%), with the Materials sector seeing earnings decrease by around 9.7%.
Image Source: Twitter, FactSet
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