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A fairly flat end to what has been a positive year for Markets, albeit with one trading day to go (27th December). The ASX 200 is up ~8%, a solid outcome, though when we compare it to US markets it’s certainly underwhelming against the S&P500 up ~25%. Having international exposure during 2024 has certainly driven better performance.
The ASX200 surged +1.7% on Monday on broad-based buying and a classic Christmas absence of selling; it’s a shame we’d previously corrected over 5% from the all-time high earlier in the month, taking the index down to a fresh 3-month low on Friday. Monday saw over 90% of the main board close higher, but the financials and mining stocks led the advance, delivering the local markets’ best day since the end of July.
The ASX recouped all on Friday’s losses and some as low volumes (Sydney CBD was a ghost town today) colluded with a more favourable read on US inflation on Friday night to propel stocks higher. Personal Consumption Expenditures (PCE), the Feds preferred measure came in softer than expected which cast a shadow on Jerome Powells turn of phrase/view on rates earlier last week.
The ASX200 was thumped 2.76% last week after the Fed side-swiped credit markets on Wednesday when, after cutting rates 0.25%, they delivered a less dovish outlook for interest rates than was expected;
• The Fed revised its outlook for rate cuts in 2025, indicating that there will be two reductions, down from the four forecasted in September – a reasonable change in just three months.
• Credit markets have already become sceptical towards the two cuts and are now pricing in a 50-50 chance that the 2nd won’t be forthcoming before next Christmas.
• Markets have been concerned that Trump’s policies will lift inflation. The Fed appears to be getting ahead of the curve, just in case.
The ASX200 ended a volatile and tough week, down 2.76% hitting a 100-day low on Friday. The Fed was the catalyst after cutting interest rates by 0.25% on Wednesday night, but at the same time, it moved the proverbial goalposts in terms of the future path in 2025. The Fed revised its outlook for rate cuts in 2025, indicating two reductions, down from the four previously forecasted in September.
The ASX sold off early, down ~100 points and coasting sideways for the remainder of the session with investors squaring away positions and locking in profits as the final full trading week for 2024 came to an end.
The ASX200 was thumped 141 points, or 1.7% on Thursday courtesy of Jerome Powell’s change of tune, which saw the forecasted path of US interest rates shift.
The magnitude of the selloff in the U.S last night didn’t quite translate to the ASX today – a case of the bigger they are, the harder they fall. The ASX was hit hard early, down ~180pts at the 11am low before recovering 20% of the decline to finish off ~140pts.
The ASX200 ended down -0.1 % on Wednesday; the market looked excellent around midday, but the bears took over in the afternoon, with the Treasurer’s mid-year economic update potentially weighing on the confidence of the local market.
It was a story of one step forward and one step back today – the morning looked promising as the index crept up 50 points and knocked on the door of the 8,350 level, but buying grew tired and sellers flocked in to square away positions for the holiday period as we closed where we set off for the day.
