Markets Overview

  • ASX SPI 200 futures down 0.2% to 7,819.00
  • Dow Average little changed at 39,287.08
  • Aussie down 0.1% to 0.6531 per US$
  • US 10-year yield fell 1.4bps to 4.2316%
  • Australia 3-year bond yield rose 0.8 bps to 3.66%
  • Australia 10-year bond yield rose 1.8 bps to 4.03%
  • Gold spot up 0.3% to $2,177.65
  • Brent futures down 0.8% to $86.03/bbl

Economic Events

  • 10:30: (AU) Feb. Westpac Leading Index MoM, prior -0.08%
  • 11:00: (AU) Australia to Sell A$800 Million 4.5% 2033 Bonds
  • 11:30: (AU) Feb. CPI YoY, est. 3.5%, prior 3.4%

Australian February inflation data is expected to rise slightly year on year from the previous month amid higher gasoline prices and a potential bump from Taylor Swift’s concerts in Sydney and Melbourne.

Stocks wiped out gains in the final 30 minutes of Wall Street trading, with investors rebalancing their portfolios after a rally that’s already topped $4 trillion this year.

Equities finished lower for a third straight day, following a buying frenzy that saw the S&P 500 climb almost 10% in just three months. With the equity outperformance, pensions would need to sell roughly $22 billion in global stocks and buy $17 billion of fixed income in order to return to prior asset allocation levels, according to a recent estimate from Morgan Stanley.

The US equity benchmark is on track to notch five straight months of gains from November through March — a feat only accomplished one other time this century in 2013. Now, traders are debating whether the road gets rougher for the rally to keep chugging along as stock valuations remain elevated relative to history.

The S&P 500 approached 5,200, with Nvidia Corp. halting a six-day rally. Former president Donald Trump’s startup Trump Media & Technology Group Corp. climbed in its first session as a publicly traded company.

As the big debate unfolds on how concentrated or broad this year’s S&P 500 rally has been, there’s data to support both arguments.

After the year kicked off with gains focused on tech-heavy sectors, the rally has broadened out to other groups like commodities and industrials. However, looking at the contribution to total returns, 60% of gains in the gauge have been driven by just six stocks: Nvidia, Microsoft Corp., Meta Platforms Inc., Inc., Eli Lilly & Co. and Broadcom Inc.

The artificial intelligence furor gripping the stock market has made chipmakers like Nvidia increasingly crucial to the broader S&P 500 rally. The stocks are no longer cheap, adding a new level risk to further gains in the equity benchmark.

The Philadelphia Stock Exchange Semiconductor Index is priced around eight times sales, the highest in at least two decades, according to data compiled by Bloomberg. The S&P 500, by contrast, is priced around 3 times sales. Relative to the broader benchmark, the chip index is higher than it was during the dot-com peak in 2000.

As traders geared up for the Fed’s preferred inflation gauge on Friday — when markets will be closed — they parsed the latest economic readings. US consumer confidence held steady, durable goods orders climbed while home-price growth accelerated at the fastest rate since 2022.

Other News

The World Trade Organization has ruled that Australia’s anti-dumping tariffs on China’s wind towers, deep-drawn stainless steel sinks and railway wheels violate trade rules, according to a statement from the Chinese Ministry of Commerce.

  • China hopes Australia respects the WTO decision and ends the tariffs as soon as possible, ministry says.
  • China also urges Australia to follow WTO rules strictly in other trade-remedy measures, and push towards “healthy” bilateral economic and trade ties, ministry says.