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Morning Research Notes - 23.10.24
Wall Street ended Tuesday mostly flat as mixed corporate earnings and rising treasury yields weighed on sentiment, with the S&P 500 and Dow dipping slightly while the Nasdaq edged higher. Commodities had a mixed day: Spot gold rose 1.0% to $2,745.85 per ounce at 2:31 p.m. in New York, and Brent crude gained 1.6% to $75.85 per barrel. In contrast, iron ore fell 1.1% to $100.70 per tonne.
The S&P 500 closed slightly lower on Tuesday, down 0.04%, while the Dow fell 7 points, and the Nasdaq rose 0.2%, as traders balanced rising treasury yields with mixed corporate earnings. General Motors surged 10% after reporting strong Q3 earnings, while Verizon dropped 5% on mixed results. GE Aerospace weighed on the market, falling over 9% after missing revenue expectations and 3M slipped 2% despite beating estimates. RTX reported solid earnings and raised its guidance but closed flat. Tesla and other major companies like AT&T, IBM, and Coca-Cola are set to report Wednesday. About 14% of the S&P 500 has reported, with over 70% beating earnings forecasts. Meanwhile, Treasury yields continued climbing as the IMF raised its U.S. growth forecast to 2.8%, citing stronger consumption.
The Australian stock market declined on Tuesday, with the ASX 200 dropping 1.69%. Key sectors, including Materials, Financials, Information Technology, Healthcare, and Utilities, recorded losses of 1.32%, 1.85%, 0.39%, 2.43%, and 1.46%, respectively. Major commodities also faced challenges, with Aluminium, Copper, Zinc, and Nickel falling by 0.61%, 0.58%, 0.71%, and 1.57%, respectively.
Chart of the day
As the industrial market slows, industrial REITs like Goodman Group are pivoting towards data centres to repurpose excess land. While the demand-supply gap in data centres presents a promising opportunity, there is reason for caution. Companies transitioning from logistics to this complex sector may lack the necessary expertise, especially when competing with established global players. Goodman Group’s recent shift, highlighted in its communications to its investors (annual reports, market announcements), raises concerns about whether it is genuinely prepared for this transition or simply capitalising on a popular trend. Though data centres offer potential, successful execution remains a challenge for new entrants in the field.
Source: Livewire, Goodman Group
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