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Morning Research Notes - 25.11.24
U.S. markets closed higher on Friday, with the Dow Jones Industrial Average reaching a record high, driven by a rotation out of tech into blue-chip industrial names. Major commodities had a positive day: Spot gold rose 0.1% to $US2,711.0 per ounce, while iron ore increased 1.8% to $US100.2 per tonne and Brent crude climbed 1.2% to $US75.1 per barrel.
On Friday, the Dow Jones Industrial Average closed at a record high of 44,296.51, gaining 426 points or 0.8%, driven by a rotation into Blue-chip names such as Boeing, which rose over 4% following a significant defense contract. The S&P 500 increased by 0.3% and the Nasdaq added 0.2%, despite tech sector weakness, with Alphabet and Nvidia both declining. Strong business activity data and jobless claims supported market sentiment, though doubts remain about a December rate cut by the Federal Reserve. Meanwhile, Gap surged nearly 13% on strong earnings, while Intuit fell 5.7% on disappointing guidance.
On Friday, the Australian stock market closed higher, with the ASX 200 rising by 0.84%. This upward momentum was reflected across major sectors, with Materials, Financials, Utilities, and Healthcare seeing gains of 0.84%, 1.15%, 1.34%, and 1.44%, respectively. In contrast, the Info Tech sector ended the day in the red, falling by 4.45%. Major commodities had a bearish session, with Aluminium, Copper, Zinc, and Nickel falling by 0.08%, 1.3%, 0.74%, and 0.6%, respectively.
Chart of the day
During Trump’s first term, the US dollar weakened significantly, historically benefiting commodities since they are priced in dollars. A weaker dollar makes commodities cheaper for foreign buyers, boosting demand. For example, copper prices rose from US$2.50/pound to US$3.50/pound, and iron ore prices doubled from US$76/tonne to over US$155/tonne. Additionally, despite the threat of tariffs on Chinese goods, China has strategies to mitigate these impacts, such as expanding manufacturing in emerging markets with cheaper labor. This adaptability helps sustain demand for raw materials like iron ore and copper, supporting their prices even amid trade tensions.
Source: Livewire
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