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Morning Research Notes - 20.09.24
The S&P 500 surged past 5,700 for the first time yesterday, with tech stocks leading the way, as equities gained momentum from the Federal Reserve’s 50 basis point rate cut. Commodities also experienced this momentum. Spot gold increased by 1.1%, settling at $US2587.94 per ounce. Brent crude oil rose by 1.5%, bringing its price up to $US74.78 per barrel. Similarly, iron ore experienced an increase of 2.2%, with its price rising to $US92.70 per tonne.
On Thursday, the S&P 500 closed at record highs, with upward movement driven by the tech sector, following the Fed's 50 basis point rate cut. The S&P 500 rose 1.7% to 5,715.61, the Dow Jones Industrial Average increased by 532 points and the Nasdaq composite climbed 2.5%. Major tech companies like Meta, Apple, and Tesla led the gains, with chipmakers NVIDIA and Intel also performing well. Investors believe the Fed’s rate cut marks the start of an easing cycle, with more cuts expected before the end of 2024.
Australian markets continued their bullish streak on Thursday, with the ASX200 closing 0.61% higher. This positive trend was reflected across major sectors, with Materials, Financials, Info Tech, and Utilities closing up by 2.31%, 0.51%, 0.29%, and 1.37%, respectively. Healthcare ended the day in the red, closing 0.52% lower. Commodities also saw gains, with Aluminium, Copper, Zinc, and Nickel prices rising by 0.12%, 1.25%, 0.1%, and 0.85%, respectively.
Chart of the day
Gold as a commodity has outperformed gold miners, highlighting a trend in the market. Despite high gold prices, the number of new gold discoveries has significantly decreased over recent decades. This decline in discoveries raises concerns about future gold supply, as fewer new deposits are being found to replace depleting reserves. Even with high budgets allocated for exploration, the yield of new deposits remains low. The scarcity of discoveries underscores the potential for the gold market to stay in a supply deficit, potentially acting as a tailwind for prices, especially if demand for precious metals remains high.
Source: Livewire
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