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Morning Research Notes - 18.12.24
US markets closed lower yesterday, with the Dow Jones Industrial Average falling 266 points (0.6%), marking its longest losing streak since 1978, as investors focused on the Federal Reserve’s anticipated rate cut and future outlook amid persistent inflation and a strong labour market. Major commodities had a bearish day yesterday: Spot gold closed down 0.2% to $US2,646.57 per ounce, Iron Ore ended the day 0.5% lower to close at $US104.5 per tonne, and Brent Crude fell 1.2% to $US73.06 a barrel.
Wall Street closed lower on Tuesday, with the Dow Jones Industrial Average falling 266 points (0.6%), marking its longest losing streak since 1978. The S&P 500 dropped 0.4%, and the NASDAQ Composite slipped 0.3%. Retail sales in November rose by 0.7%, surpassing forecasts, indicating robust economic growth despite high interest rates. The central bank is widely expected to cut interest rates by 25 basis points at the conclusion of a two-day meeting on Wednesday. While this rate cut seems largely priced in by markets, the main focus is on the Fed’s future rate outlook. Investors anticipate the Fed will signal a slower pace of easing in 2025 due to persistent inflation and a strong labour market. In individual stocks: Tech stocks struggled, with NVIDIA falling 1%, while Tesla gained after an upgrade. Pfizer’s stock rose 4.6% on positive profit expectations for 2025.
The Australian stock market closed higher on Tuesday, with the ASX 200 gaining 0.78%. The mixed momentum was reflected across major sectors: Financials (1.16%), Info Tech (1.31%) and Health Care (1.13%) managed to notch gains. Contrastingly, Materials (-0.10%) and Utilities (-0.21%) closed down. Major commodities had a bearish day yesterday: Aluminium, Copper, Zinc and Nickel all closed in the red, falling by 0.95%, 0.63%, 0.68% and 1.39% respectively.
Chart of the day
Despite international curbs on Chinese EV exports due to concerns about government subsidies, domestic EV sales in China have continued to grow. BEVs remain the largest contributor to sales, though PHEVs are increasingly significant. China’s share of the global EV market has risen to 76%, solidifying its leadership in EV adoption. However, YoY growth rates have moderated, reflecting a slowdown in BEV sales and indicating a maturing market with potential saturation in domestic demand.
Source: MacroBond
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