Markets Overview
- ASX SPI 200 futures up 0.7% to 8,296.00
- Dow Average little changed at 43,719.14
- Aussie up 1.4% to 0.6664 per US$
- US 10-year yield fell 10bps to 4.34%
- Australia 3-year bond yield little changed at 4.13%
- Australia 10-year bond yield rose 1 bp to 4.64%
- Gold spot up 1.2% to $2,691.35
- Brent futures up 1.0% to $75.65/bbl
Economic Events
- 11:00: (AU) Australia to Sell A$800 Million 2.75% 2035 Bonds
- 13:45: (AU) RBA’s Jones-Panel
Stocks hit fresh all-time highs, climbing alongside bonds and commodities, in a concerted cross-asset advance that by one measure was the best for a Federal Reserve day in 2024.
Equities extended their post-election rally, with the S&P 500 approaching 6,000 and notching its 49th record this year. That was after Jerome Powell said the economy is strong while refraining from signaling whether or not the Federal Reserve will skip cutting rates, following Thursday’s reduction of a quarter percentage point. Treasury yields dropped across the curve and the dollar saw its biggest decline since August.
“Powell & Co. reminded investors about the solid economic footing the US continues to stand on,” said Bret Kenwell at eToro. “Powell would not tip his hand on whether the Fed would likely cut rates in December, which shouldn’t surprise investors. However, the Fed appears more comfortable with the labor market and the current US economic backdrop than they did a few months ago.”
Fed officials unanimously lowered the federal funds rate to a range of 4.5% to 4.75%. They tweaked language to note “labor market conditions have generally eased,” and repeated “the unemployment rate has moved up but remains low.” The statement removed the reference to “further” inflation progress, noting inflation “has made progress toward the committee’s 2% objective but remains somewhat elevated.”
To Neil Dutta at Renaissance Macro Research, the latest Fed statement does not put a December skip in play.
“We thought Powell’s comments were generally dovish, and he gave several indications that a December cut remains his base case,” said Aditya Bhave at Bank of America Corp. “Given that the policy mix will not change for a while, we remain comfortable with our call for another 25bp cut in December.”
The S&P 500 rose 0.7%. The Nasdaq 100 climbed 1.5%. The Dow Jones Industrial Average was little changed. A Bloomberg gauge of the “Magnificent Seven” megacaps added 2.3%. Lyft Inc. jumped 23% after the ride-hailing company gave a bullish outlook. A closely watched gauge of banks dropped 2.7% after gaining over 10% in the previous session. JPMorgan Chase & Co. slid 4.3% after an analyst downgrade.
Treasury 10-year yields declined 10 basis points to 4.33%. The Bloomberg Dollar Spot Index fell 0.8%.
