Donald Trump will become President of the United States tomorrow morning (our time), and as we know, since his victory in November, equities have embraced his return to the Whitehouse. This has pushed valuations higher as momentum moves dominated 2024 with many major stocks trading well above their average P/E’s of recent years, with the banks receiving significant coverage in the press.
Usual Market Matters reports will recommence on Monday the 20th January, however, a big move on Friday night in the U.S and a SPI Futures pricing a decline of 71 points / 0.86% this morning suggest an update is warranted. Markets begin 2025 with great expectations as anticipation of US tax cuts and pro-business deregulation, a continued economic soft landing, ongoing rate cuts in the US and the start of a cutting cycle in Australia.
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 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 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 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 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.
Yesterday, an index of Asian currencies retreated to a two-year low. Pessimism towards China's economic outlook, coupled with the belief that Trump would support the Greenback, has sent the Bloomberg Asia Dollar Index (ADXY) down more than 4% since late September.
The ASX200 slipped another -0.56% on Monday, closing at its lowest level in a month ahead of global rate decisions. The local benchmark retreated for the fifth straight session, its longest losing streak since April. Losses were broad-based, with over 70% of the main board retreating but led by mining and real estate stocks.
The last year has been a roller-coaster for bonds, with analysts changing their minds about the path for RBA rate rises/cuts like the weather! The only constant has been RBA Governor Michele Bullock, who has been consistent in her message to the market, i.e. don’t get too optimistic towards rate cuts as inflation remained sticky. That all changed on Tuesday afternoon.
Usual Market Matters reports will recommence on Monday the 20th January, however, a big move on Friday night in the U.S and a SPI Futures pricing a decline of 71 points / 0.86% this morning suggest an update is warranted. Markets begin 2025 with great expectations as anticipation of US tax cuts and pro-business deregulation, a continued economic soft landing, ongoing rate cuts in the US and the start of a cutting cycle in Australia.
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 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 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 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 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.
Yesterday, an index of Asian currencies retreated to a two-year low. Pessimism towards China's economic outlook, coupled with the belief that Trump would support the Greenback, has sent the Bloomberg Asia Dollar Index (ADXY) down more than 4% since late September.
The ASX200 slipped another -0.56% on Monday, closing at its lowest level in a month ahead of global rate decisions. The local benchmark retreated for the fifth straight session, its longest losing streak since April. Losses were broad-based, with over 70% of the main board retreating but led by mining and real estate stocks.
The last year has been a roller-coaster for bonds, with analysts changing their minds about the path for RBA rate rises/cuts like the weather! The only constant has been RBA Governor Michele Bullock, who has been consistent in her message to the market, i.e. don’t get too optimistic towards rate cuts as inflation remained sticky. That all changed on Tuesday afternoon.
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