.svg "close (3)"){kind=small}
Image Source: Adobe Stock
Morning Research Notes - 16.09.24
Wall Street experienced solid gains on Friday, as investor expectations of a 50-basis point rate cut by the Fed rose to 49%. Commodities saw mixed movements. Spot gold rose by 0.8%, reaching $US2577.70 per ounce by 4:59 PM in New York. Brent crude experienced a modest gain of 0.2%, closing at $US72.13 per barrel. In contrast, iron ore prices fell by 2%, dropping to $US92.90 per tonne.
On Friday, US stocks saw significant gains, closing out a strong week. The S&P 500 rose by 0.5%, the Nasdaq Composite climbed 0.7%, and the Dow Jones Industrial Average added 0.5% (about 300 points). This positive movement was driven by rising expectations of a substantial interest rate cut by the Federal Reserve, with investors now pricing in a 49% chance of a 50-basis point cut this week, compared to just a 15% chance at one point on Thursday.
The Australian markets ended the week on a positive note, with the ASX 200 closing 0.30% higher on Friday. However, this positive trend was not reflected across major indices. Financials, Information Technology, Health Care, and Utilities saw decreases of 0.61%, 0.49%, 0.24%, and 0.38%, respectively. Materials was the only major index to close positively, gaining 2.25%. Commodities also experienced a bearish day, with Copper, Zinc, and Nickel recording losses of 0.38%, 0.41%, and 1.32%. Aluminium, however, gained 0.61%.
Chart of the day
Recent data reveals that while US inflation appears low, services inflation, driven largely by rental costs, remains high. This discrepancy arises from the methodology used to calculate rents within inflation data. Rental contracts typically do not expire monthly, meaning current rental prices are gradually incorporated into inflation data. As a result, reported rental inflation may not accurately reflect the immediate market conditions, leading to an overstatement of inflation. The gradual inclusion of rental costs can skew inflation data (given the significant weighting placed on dwelling costs) making inflation appear higher than it ordinarily would if more current rental prices were considered.
Source: Livewire, Nucleus Wealth
If you want to receive our top 3 income stocks click on the button below:
Invest Well,
Australian Stock Report
This report has been prepared by Atlantic Pacific Securities Pty Limited trading as ASR Wealth Advisers ABN 72 135 187 085 (“ASRW”) CAR 339207 of Amalgamated Australian Investment Solutions Pty Ltd (AAIS) (AFSL 314 614 - ABN: 61 123 680 106) and distributed with its consent by Australian Stock Report Pty Ltd ABN 94 106 863 978 (ASR) AFSL 301682. ASRW and ASR are part of Amalgamated Australian Investment Group Limited ABN 81 140 208 288. Whilst the information presented herein is believed to be reliable and sourced from public sources thought to be reliable, neither ASRW nor ASR make any representations as to its accuracy or completeness. This report is provided for informational purposes only. It is not an offer or a solicitation of an offer to buy or sell any financial products or to participate in any particular trading strategy. Any advice perceived to be included within this report is provided on a general advice basis only and therefore it does not take into account personal financial situation, objectives and needs of any individual. Before making any decision about financial products, investors must consider whether it is appropriate for them in light of their personal circumstances and seek professional investment, tax, legal and/or personal financial advice. Where applicable, investors should obtain and consider a Product Disclosure Statement, prospectus or other disclosure material relevant to the financial product before making a decision to acquire it.
ASRW’s, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Opinions, estimates and projections constitute the current judgement of the author as at the date of this report. They do not necessarily reflect the opinions of ASRW or any of their related entities, must not be seen as an endorsement in any way and are subject to change without notice. ASRW has no obligation to update, modify or amend this report or otherwise notify a recipient if any opinion, forecast or estimate contained herein changes or subsequently becomes inaccurate. Target prices are inherently imprecise and a product of the analyst’s judgement. Prices and availability of financial products are subject to change without notice and investment transactions can lead to losses as a result of price fluctuations, extreme volatility and other factors. If a financial product is denominated in a currency other than an investor’s currency, a change in exchange rates may adversely affect the investment.
Investing in financial markets involves risk and investments may go up and down. The payment of income and the return of capital are not guaranteed. Past performance is not an indicator of future results. Macroeconomic fluctuations often account for most of the risks associated with exposures to instruments that offer fixed or variable interest rates. Upside surprises in inflation, fiscal funding needs, and FX depreciation rates are among the most common adverse macroeconomic shocks that may impact the market value of any investment. Counterparty exposure, issuer creditworthiness, client segmentation, regulation, changes in tax policies, currency convertibility and settlement issues related to local clearing houses are also important risk factors to take into consideration.
The opinions and recommendations in the research report are based on a reasonable assessment by the research staff member who wrote the report using information provided by the product issuer and generally available in the market. ASRW’s research staff are well qualified and give their opinions and recommendations on reasonable grounds and based on the information available to them. ASRW’s research staff are remunerated by salary and do not receive any commissions or fees. Annual bonuses may be paid on a discretionary basis and as relevant to their role. Employees and/or associates of ASRW, ASR and their related entities may hold one or more of the stocks, securities or investments reviewed in this report. Any personal holdings by employees and/or associates of ASRW, ASR and their related entities should not be seen as an endorsement or recommendation in any way. For information about ASRW, its financial services and Financial Services Guide, please visit www.asrw.com.au .
