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Morning Research Notes - 14.11.24
US markets closed mostly flat yesterday as inflation data aligned with expectations, boosting confidence in a December rate cut despite a rebound in Treasury yields. Major commodities performed mixed: Spot gold fell 0.6% to $US2583.29/oz, Brent crude rose 0.6% to $US72.29 a barrel, and iron ore edged up 0.03% to $US100.55 a tonne.
On Wednesday, Wall Street closed with modest gains as the S&P 500 eked out a 0.02% increase, while the Dow rose 47 points (0.1%) and the Nasdaq slipped 0.2%. Treasury yields rebounded from session lows despite inflation data meeting expectations, which supported bets of a December rate cut, now seen as a 90% likelihood. Core consumer prices rose 3.3% year-on-year, aligning with forecasts and easing fears of a Fed hold on rates. Rivian surged 14% after news of a major investment from Volkswagen, while Spotify and Cava also saw gains on strong earnings. However, Skyworks Solutions dropped over 4% following a weaker-than-expected forecast.
On Wednesday, the Australian stock market closed lower, with the ASX 200 declining by 0.76%. This downward trend extended across major indices, as the Materials, Financials, Info Tech, and Healthcare sectors dropped by 0.73%, 1.07%, 0.97% and 0.67%, respectively. In contrast, Utilities closed in the green, gaining 0.58%. Major commodities also experienced a bearish day, with Aluminium, Copper, Zinc, and Nickel decreasing by 0.98%, 2.66%, 2.13%, and 0.82%, respectively.
Chart of the day
Speculation around looser financial regulation, a stronger stance on interest rate decisions, and Donald Trump's "drill, baby, drill" energy policy has boosted banking and oil & gas stocks, while shares in alternative energy companies have struggled post-election. Trump's protectionist trade approach, prominent in his first term, is expected to continue, raising concerns among investors, especially in agriculture and food sectors. China previously retaliated against his tariffs with a 25% increase on US goods in these sectors, leading to a drop of over US$27 billion in exports from US firms between mid-2018 and the end of 2019.
Source: Livewire
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