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Morning Research Notes - 20.11.24
US markets witnessed differing performance overnight, with geopolitical concerns weighing some segments of the market down, as Nvidia jumped heading into its Q3 earnings. Major commodities had a broadly positive day: Spot gold rose 0.7% to $US2,630.52 per ounce, while iron ore increased 1.8% to $US101.15 per tonne and Brent (crude) gained 0.01% to $US73.31 per barrel.
Wall Street closed mixed on Tuesday, with the S&P 500 up 0.4% and the Nasdaq gaining 1%, driven by a 4% surge in Nvidia (NVDA.NAS) ahead of its Q3 earnings report, a key indicator for AI-related tech demand. Nvidia shares, up nearly 200% year-to-date, have continued to benefit from robust AI chip sales. Also in the tech sector, Super Micro Computer (SMCI.NAS) rallied 29% on the announcement of a new auditor (BDO). Walmart (WMT.NYSE) gained 3% after the company raised its annual revenue and profit forecasts for the third time, contrasting Lowe's (LOW.NYSE), which fell 4% on weak 2024 revenue guidance. Meanwhile, geopolitical tensions heightened as Russian President Vladimir Putin revised Russia’s nuclear doctrine, lowering the threshold for a potential nuclear strike, a move coinciding with U.S support for Ukrainian missile strikes into Russian territory.
The Australian stock market closed higher yesterday, with the ASX 200 rising by 0.88%. Growth was reflected across all major sectors, with Financials, Information Technology, Healthcare, Materials and Consumer Staples all closing higher. Commodities fell somewhat, with Aluminium (-2.95%), Copper (-2.16%), Zinc (-2.63%) and Nickel (-1.35%) all witnessing losses.
Chart of the day
2024 has witnessed one of the strongest YTD (Year-To-Date) performances of the S&P 500, with the index up almost 24% since the 1st of January. Measured since 1928, 2024 ranks within the top decile of annual performances for the S&P, highlighting how EPS growth by the so called "Magnificent 7" has dragged the market higher. This YTD return is significantly above the historical average of c.11% per annum.
Source: Goldman Sachs, Bloomberg, DataStream, X.com
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