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Morning Research Notes - 31.10.24
On Wednesday, US markets closed lower as the S&P 500, Dow Jones, and NASDAQ all declined, driven by mixed earnings reports and economic data, alongside rising Treasury yields and election-related uncertainties. Major commodities had a positive day: Spot gold rose 0.5% to $US2,789.08 an ounce, iron ore increased 0.2% to $US103.80 a tonne, and Brent crude climbed 1.8% to $US72.43 a barrel.
Yesterday on Wall Street, major indices closed lower after a volatile session. The S&P 500 fell 0.3%, the Dow Jones Industrial Average dropped 78 points (0.2%) and the Nasdaq declined 0.5%. Alphabet rose 3% on strong earnings driven by AI investments and YouTube ad sales, but the broader tech sector struggled, with AMD falling 9% due to underwhelming guidance and Super Micro Computer Inc. dropping over 30% after its auditor resigned. Economic data showed that the US Q3 GDP grew by 2.8%, missing expectations, while ADP private sector employment increased by 233,000. The Federal Reserve is expected to cut rates by 25 basis points next week, with market volatility anticipated to rise ahead of the 2024 presidential election.
On Wednesday, the Australian stock market closed lower, as the ASX 200 declined by 0.84%. This negative trend was reflected across major indices, with the Materials, Financial, Info Tech, Health Care, and Utility sectors recording losses of 0.44%, 0.9%, 0.32%, 1.23%, and 1.12%, respectively. In contrast, major commodities ended the day in the green, with Aluminium, Copper, and Zinc rising by 0.37%, 0.18%, and 0.88%, respectively. However, Nickel prices fell by 0.69%.
Chart of the day
In September 1999, the then-Howard government changed the capital gains tax law from allowing investors to index their cost base (to CPI), to effectively halving the capital gains rate for assets held more than one year. As the housing debate rages many commentators point to this tax change as a core reason Australian residential prices have soared this century – yet we see no evidence it had any impact on assets that had a similar advantage to the changes – namely equities.
Source: Livewire
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