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Image Source: London Stock Exchange Group
Morning Research Notes - 15.11.24
Jerome Powell weighed on investor sentiment. Major commodities had a mixed day: Spot gold fell 0.1% to $US2,570.07 per ounce, while iron ore dropped 2.1% to $US98.45 per tonne. In contrast, Brent crude rose 0.1% to $US72.35 per barrel.
Wall Street closed lower Thursday as Fed Chair Powell gave hawkish remarks at his speech in Dallas, citing the economy’s current strength as a reason not to be in a hurry to cut interest rates. The Dow Jones Industrial Average fell by 207 points (0.5%), the S&P 500 dropped by 0.6% and the Nasdaq Composite also declined by 0.6%. The 2-year treasury yield rose to 4.34% following Powell’s comments. Bets on a December rate cut decreased from 80% to 60%. Additionally, US producer prices increased more than expected in October, reinforcing inflation concerns. In corporate news, Disney’s stock surged 6% due to strong streaming business performance, while Cisco’s stock fell 2% on a weak outlook.
On Thursday, the Australian stock market closed higher, with the ASX 200 rising by 0.37%. This positive momentum was reflected across major sectors, as Financials, Information Technology, and Utilities saw gains of 1.37%, 1.82%, and 0.57%, respectively. In contrast, the Materials and Healthcare sectors ended the day in the red, falling by 1.16% and 0.6%. Major commodities also had a bearish session, with Aluminium, Copper, and Nickel declining by 0.63%, 0.40%, and 1.43%, respectively. However, Zinc posted a modest gain, rising by 0.26%.
Chart of the day
Expectations for the future path of US interest rates moved higher the day after the election, in a continuation of a trend that started a few weeks earlier, one which saw the 25bps rate cut delivered by the Fed on 7 November having a minimal impact. Uncertainty about rates is a theme that could dominate markets during Mr Trump’s second term, due to risks stemming from renewed inflationary concerns, looser fiscal policy and a weakening of the regulatory and monetary policy frameworks.
Source: London Stock Exchange Group
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