Markets Overview
- ASX SPI 200 futures up 0.4% to 8,286.00
- Dow Average up 0.7% to 42,400.01
- Aussie down 0.4% to 0.6584 per US$
- US 10-year yield rose 2.6bps to 4.2660%
- Australia 3-year bond yield rose 7 bps to 3.98%
- Australia 10-year bond yield rose 6.9 bps to 4.48%
- Gold spot down 0.2% to $2,742.68
- Brent futures down 5.4% to $71.93/bbl
Economic Events
Stocks rose at the start of the busiest week for corporate earnings, with traders also gearing up for the US election and key economic data that will set the stage for the next Federal Reserve decision.
Most major groups in the S&P 500 gained, though energy shares joined a slide in oil. Crypto companies surged, with Bitcoin up about 3%. Trump Media & Technology Group Corp. soared 22% as retail traders touted the stock after Donald Trump’s high-profile event in New York Sunday. The company has traded like a proxy for sentiment of his perceived chances of returning to the White House, with recent moves more correlated with betting markets as opposed to actual polling. Conservative video network company Rumble Inc. climbed 14%. In late hours, Ford Motor Co. dropped after trimming its profit forecast.
A victory for Trump would be more beneficial for stocks and Bitcoin relative to his Democratic opponent, while a Kamala Harris presidency would bring slightly more relief to housing costs, according to a Bloomberg Markets Live Pulse survey. Some 38% of respondents see equities accelerating a year from now under the Republican candidate, versus 13% under the Democrat.
“Markets have been extremely active over the past month as traders have juiced up the already ebullient scenario baked into equity valuations, adding improved odds of a Republican sweep to the list of goodies discounted,” said Lisa Shalett at Morgan Stanley Wealth Management.
Callie Cox at Ritholtz Wealth Management says the pre-election jitters still haven’t shown up in the stock market. The S&P 500 hasn’t had a 1% up or down day this month. If that continues to be the case, it will be the first October without a move that big since 2017, she said. It’d also be the first October of an election year without a 1% move since 1968.
“We’re heading into a busy two weeks,” Cox said. “The election conversation will be the loudest, but the packed slate of earnings and economic data could be what markets care about the most. And the results could be noisy, especially from the jobs side.”
A week before Fed gathers to reflect on the appropriate tempo of rates cuts, data is set to show underlying resilience in the US economy and a temporary hiccup in jobs growth. Investors are also awaiting results from firms accounting for nearly 42% of the S&P 500’s market capitalization, including several big techs like as Apple Inc., Microsoft Corp. and Meta Platforms Inc.
The S&P 500 rose 0.3%. The Nasdaq 100 was little changed. The Dow Jones Industrial Average gained 0.6%. The Russell 2000 of small caps climbed 1.6%.
Bonds fell amid weak demand for a pair of US note sales. Treasury 10-year yields advanced three basis points to 4.27%. Oil tumbled as Israel limited Iran strikes to military targets.
