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Morning Research Notes - 18.10.24
US markets closed strong on Friday, with the Dow Jones, S&P 500, and Nasdaq posting gains driven by upbeat earnings, particularly from Netflix, and broad momentum in technology stocks. Iron ore tumbled 4.2%, closing at $100.35 per tonne, while Brent crude slipped 0.3% to $73.96 per barrel. In contrast, spot gold continued its rally, rising 0.7% to $2,692.17 per ounce.
Wall Street closed on a high note on Friday, with the Dow Jones, S&P 500, and Nasdaq all posting gains, driven by strong earnings, particularly from Netflix, which surged 11.1% after surpassing subscriber expectations. The S&P 500 rose 0.4%, the Nasdaq climbed 0.63%, and the Dow edged up 0.09%, marking the Dow's fifth record high in six sessions, despite a 3.1% drop in American Express shares. Technology stocks, led by Apple and Nvidia, also boosted the market, while financial companies reported positive earnings. However, energy was the weakest sector, dropping 0.4%, weighed down by falling oil prices and disappointing earnings from SLB. Despite concerns over stretched valuations and upcoming U.S. elections, strong corporate earnings continue to sustain market momentum.
Chart of the day
With the US elections around the corner, markets are likely to become more unpredictable as elections create uncertainty about future policies. Markets tend to stay calmer when the same government stays in power, but surprise results can cause sharp ups and downs. As shown in the above chart, the UK stock market grew well during some Conservative governments, like 1951-1964 and 1979-1997, though other periods saw slower growth. Labour governments also had successes, such as in 1974-1979. This suggests that while certain parties may seem better for the market, outside events often have a bigger impact. Market volatility usually increases around elections, with industries like healthcare and defence being more affected by policy changes. Global events, like overlapping UK and US elections this year, can make markets even more unstable.
Source: Economics Observatory
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