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A strong start for the ASX, buoyed by a solid run in Commodity markets overnight saw the market up over 90pts early on before tapering off somewhat as the day progressed.
The ASX200 advanced +0.3% on Thursday, in a very different session from the one enjoyed by US equities following Trump’s victory. Less than 55% of the local mainboard and 5 of the major 11 sectors closed in positive territory.
An intriguing session today with our first crack at digesting what a Trump Presidency could mean locally. The overwhelming takeaway being higher interest rates are a negative for property & infrastructure, a stronger $US will hinder Gold & related equities which were hit , US earners should benefit and found some love, industrial commodities were okay given a better global growth outlook partially offsetting the headwind of a stronger greenback while the “drill baby drill” beneficiaries in mining services also found support.
We are making two changes to the Active Growth Portfolio Today
The bookies again proved to be a far better gauge of politics than the polls, with Donald Trump steamrolling Kamala Harris in yesterday’s election. We all know the result: the Republicans are poised to control the House and Senate, making Trump one of the most powerful Presidents in history, a far cry from a jail cell.
US equity futures rallied, bonds yields traded materially higher (US 10’s +18bps), the $US Dollar Index up +1.4%, the AUD down the same amount & Bitcoin +8% all indicate that Trump is now a very short Favourite to win a 2nd term in office.
Melbourne Cup Day saw the RBA leave interest rates at 4.35% while indicating they will remain at their 13-year high for some time. This is not ideal for Prime Minister Albanese, as a federal election is due between February and May. Labour has already started looking for votes from the younger generation by targeting fees/payments around further education.
Each year, Macquarie’s Quant team puts out their picks for the cup, and we’ve included the key points for Market Matters Members. Thanks to Macquarie for sharing the insights, and as always, punt with your head, not over it!
The ASX200 enjoyed a solid start to the Presidential election week, closing up +0.6%. The financials dragged the index higher throughout the session, contributing ~50% to the market’s advance. Westpac (WBC) reversed an early intra-day ~2.5% loss to finish up +0.9% as investors digested its FY report.
The ASX followed US S&P500 futures and Westpac (WBC) lower in the early morning before reversing higher throughout the day.
