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Morning Research Notes - 30.04.25
U.S. stocks closed higher on Tuesday, driven by falling Treasury yields, positive trade developments, and a mix of positive earnings results. Commodities experienced mixed performances on Tuesday. Gold declined by 0.8% to $US3317.41 an ounce, while Brent Crude (oil) experienced a decline of 2.9%, falling to $US63.93 a barrel. Contrastingly, iron ore slightly increased by 0.1%, reaching $US98.55 a tonne.
Wall Street closed sharply higher on Tuesday, with the S&P 500 rising 0.6% for the sixth consecutive day, the Dow Jones Industrial Average gaining 300 points (0.8%), and the Nasdaq also up 0.6%. This rally was driven by falling Treasury yields and positive trade news, including President Trump's plan to ease 25% tariffs on cars and parts, and Commerce Secretary Lutnick's announcement of an imminent major trade deal. However, consumer confidence fell to 86.0 in April, the lowest since May 2020, causing Treasury yields to drop. The Atlanta Fed's GDP print for Q1 fell to -2.7%, and JOLTS Job Openings decreased to 7.192 million. Investors also mulled upcoming economic data releases, including the PCE price index and monthly non-farm payroll data (both of which are key indicators for the Fed). In corporate earnings, General Motors fell 0.7% on the suspension of guidance & the cancellation of its share buyback program, Coca-Cola gained 0.8% despite revenue dropping, Spotify fell over 3% on weak user guidance, and UPS slipped 0.5% on weaker-than-expected guidance, with the company announcing 20,000 layoffs. The market now awaits earnings from the MAG7, with firms like Apple, Microsoft, Amazon, and Meta Platforms reporting later this week.
The Australian stock market closed higher on Tuesday, with the ASX 200 increasing by 0.91%. Key sectors such as Materials, Financials, Information Technology, Healthcare, and Utilities all ended the day in positive territory. Major commodities had a bearish day, with Aluminium, Zinc, and Nickel all closing lower, falling by 0.50%, 0.73%, and 0.52% respectively. However, Copper managed to post gains, rising by 0.02%.
A study from McKinsey to measure investor confidence showed that, for the first time since December 2022, more respondents expect global conditions to worsen over the next six months than to improve. The likelihood of a global recession is seen as increasingly probable, with nearly 70% of respondents now predicting a recession scenario for 2025-2026, up from 53% last quarter. The most cited scenario is a demand-led recession, driven by declining consumer confidence. While respondents are more optimistic about their own economies, the share expecting improvement (39%) is the lowest since June 2022, and 50% foresee rising unemployment, the highest since September 2020. North American respondents are particularly pessimistic, with 77% anticipating higher unemployment, compared to 48% in December.
Source: McKinsey
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