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Morning Research Notes - 10.10.24
US markets saw gains on Wednesday as investors reacted to the release of the minutes from the FOMC's recent meeting. The market is also awaiting the Consumer Price Index (CPI) inflation report due Thursday. Commodities had a disappointing day: Spot gold dropped by 0.6% to $2,606.96 per ounce. Brent crude fell 0.7% to $76.64 per barrel. Conversely, iron ore prices gained 0.1%, closing at $105.15 per tonne.
Wall Street had a positive session overnight. The S&P 500 rose by 0.7%, while the Dow Jones climbed 1%, adding 431 points. The NASDAQ also saw a 0.5% increase. Confidence in the market rose as investors focused on the FOMC's meeting minutes. The minutes showed that most policymakers fell in favour of a 50 basis point rate cut, though some would have preferred a smaller 25 basis point cut. Meanwhile, Alphabet’s shares dropped due to potential antitrust action from the US Department of Justice. Investors now await the release of Thursday's CPI report.
On Tuesday, the Australian stock market closed positively, with the ASX 200 gaining 0.13%. Key sectors such as Financials, Info Tech, Health Care, and Utilities saw increases of 0.55%, 1.41%, 1%, and 0.82% respectively. However, the Materials sector declined by 1.39%. Major commodities ended the day in the red, with Aluminium, Copper, Zinc, and Nickel posting losses of 3.26%, 2.01%, 2.25%, and 2.55% respectively.
Chart of the day
When interest rates began rising in 2022, infrastructure investments, both listed and unlisted, initially suffered as higher borrowing costs made them less appealing. Listed infrastructure, such as publicly traded renewable energy companies, quickly reflected this impact, but rebounded in 2023 as markets adjusted, returning to typical performance levels by 2024. Unlisted infrastructure, which includes privately held assets like renewable energy projects and utilities, experienced a more gradual impact, maintaining steady returns with an annualised gain of 8.9% as of early 2024. The recovery in both categories was primarily driven by strong performance in renewable energy and long-term energy contracts.
Source: CBRE
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