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Morning Research Notes - 13.03.25
US markets closed higher yesterday, driven by gains in the tech sector and supported by cooling inflation data, despite ongoing uncertainty surrounding new tariffs on steel and aluminum. Major commodities experienced a mixed day on Wednesday: Gold rose by 0.6% to $US2932.24 an ounce, Brent oil increased by 2.1% to $US70.97 a barrel, and Iron ore, contrastingly, slightly decreased by 0.2% to close at $US100.60 a tonne.
Wall Street closed higher yesterday, with the S&P 500 rising 0.4%, the Nasdaq 100 up 1.2%, and the Dow Jones Industrial Average adding 0.4%. The tech sector led the gains, driven by an 8% rally in NVIDIA. Cooling inflation data, with the headline CPI at 2.8% year-over-year and 0.2% month-on-month, eased stagflation concerns and supported market sentiment. Core CPI also decelerated to 3.1% year-over-year and 0.2% month-on-month, both below estimates. Meanwhile, ongoing tariff uncertainty persisted as Trump's expanded tariffs on steel and aluminum came into effect, prompting retaliatory measures from the EU and threats of further tariffs on imported cars from the single market.
On Wednesday, the Australian stock market closed lower, with the ASX 200 falling by 1.33%. Major sectors, including Materials, Financials, Information Technology, and Healthcare, all ended the day in the red, declining by 1.11%, 1.60%, 1.12%, and 1.22%, respectively. In contrast, Utilities closed higher, rising by 0.02%. Major commodities had a bullish run yesterday, with Aluminum, Copper, Zinc, and Nickel all ending the day in the green.
Chart of the day
Recent positive news for the Eurozone may be losing momentum, with implementation risks posing significant challenges. Eurozone equities seem overbought compared to the US in the short term. Valuations have increased, with the forward P/E ratio rising from 11x two years ago to 15x now, which is above the 20-year average.
Source: IBES, ChartOfTheDay
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