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Morning Research Notes - 12.09.24
The S&P 500 closed higher yesterday; driven by Nvidia’s impressive 8% stock surge, counterbalancing inflation worries and mixed market reactions. On Wednesday, commodity prices showed mixed movements. Spot gold decreased by 0.2%, settling at $US2512.21 per ounce. In contrast, Brent crude saw a significant rise of 2.1%, reaching $US70.65 per barrel. Iron ore also experienced an increase, climbing by 2.5% to $US92.85 per tonne.
On Wednesday, the S&P 500 closed higher, rising by 0.5%, largely driven by an impressive 8% surge in Nvidia’s stock. This boost in the tech sector helped counterbalance concerns about a potential significant interest rate cut by the Federal Reserve, following data that showed a slight increase in core inflation. The Nasdaq Composite also saw a substantial gain of 2.1%, while the Dow Jones Industrial Average dipped by 0.2%. The market’s mixed reaction highlighted the tension between the optimism in tech stocks, spurred by Nvidia’s potential export opportunities to Saudi Arabia, and the broader apprehensions about persistent inflationary pressures.
The Australian markets faced a challenging day, with the ASX 200 closing 0.3% lower on Wednesday. Most major indices also posted losses. The Financials, Information Technology, and Health Care sectors saw decreases of 1.46%, 1.40%, and 0.30%, respectively. However, the Materials and Utilities sectors experienced gains of 1.67% and 0.58%. Commodities broke their bearish streak, with Aluminium, Copper, Zinc, and Nickel posting gains of 1.36%, 0.81%, 2.79%, and 0.58%.
Chart of the day
In the world of finance, timing is crucial for bond investors, especially when navigating the yield curve. With the Reserve Bank of Australia (RBA) potentially entering an easing cycle, investors who strategically play the yield curve could see substantial returns. This approach involves extending bond duration as a defensive measure, capitalising on the anticipated rate cuts. Despite the uncertainty surrounding the exact timing of these cuts, the broader economic landscape, including inflation and global monetary policies, suggests that this strategy could be particularly advantageous for long-term fixed-rate bond investors.
Source: Livewire
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