A positive (shortened) session overnight on Wall Street with the Dow Jones up +390pts/0.91% while the S&P 500 and Nasdaq advanced 1.1% and 1.4% respectively in quiet US trade. All 11 sectors were higher led by Consumer Discretionary and large cap technology, Tesla (TSLA US) the standout up 7.36%
The ASX 200 extended May's advance to +3.2%, taking the index within striking distance of its February all-time high. However, although the market finished up 0.5%, gains were far from broad-based, with over 45% of the ASX200 closing lower.
The ASX hit a new 3-month high today on residual optimism from yesterdays more dovish RBA rhetoric. The majority of stocks rallied, banks pushed up again and we saw a number of corporates provide solid updates, though not all were rosy. The backdrop for Australian equities has certainly improved in the last month, and it just seems a matter of time before we’re writing about new all-time highs at the index level.
The ASX200 advanced +0.6% on Tuesday following the 0.25% rate cut by the RBA and a far more dovish outlook from Michele Bullock. Bond yields plunged on commentary about inflation, now within the RBA target band both in terms of the headline rate and the trimmed mean, with RBA forecasts expecting it to stay that way.
An interesting session for Aussie stocks, with initial strength being sold into, which has been a trend of late, only for the RBA to deliver a more ‘dovish’ cut than expected at 2.30pm which prompted a good bounce across most sectors into the close.
Monday saw the ASX200 fail to notch its 9th consecutive gain following Moody's US credit rating downgrade. The index finished down -0.6%, with over 65% of the main board retreating in line with US S&P 500 futures ahead of the night's fascinating session.
A soft session to start the week and it seems the market has taken the US debt downgrade from Moody’s as a catalyst to reduce risk, particularly sectors exposed to global growth such as commodities.
As the US first-quarter earnings season draws to a close, stocks have rallied on easing trade tensions and results that have largely been better than feared/expected. However, companies across the US, Europe and China are pulling their forecasts for the year or providing gloomy outlooks, citing rising costs, weak consumer sentiment and a lack of business confidence as a result of President Donald Trump’s worldwide trade offensive - they’re laying the foundations for a tough 2nd half of 2025, while hopefully hoping to overdeliver if things turn out not too badly.
The ASX 200 ended the week up +1.4 %, taking the month's gains to +2.7%, as the index pushed within striking distance of February's all-time high. The energy and tech sectors drove the gains, both ending the week by more than 5%, while defensive/rate-sensitive stocks dragged the chain, i.e. “risk on” was the order of the day. Out of the mainboard's 11 sectors, only the consumer staples, Utilities, and real estate sectors closed lower. The US-China “Trade Truce” set the platform for a strong start to the week, before the Australian market posted its highest level in three months on Friday after soft US economic data paved the way for interest rate cuts in Australia and the United States. The positive statistics are continuing to line up:
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