Last Night's Market Recap
Overnight – Equites consolidate gains on further evidence of cooling inflation
Stocks closed marginally higher after data showed inflation continues to ease and a rally in Target pushed retailers higher following better-than-expected third-quarter results.
PPI slowed to a pace of 1.3% in the 12 months through October from a 2.2% increase in September, missing expectations for a rise of 1.9%, adding further optimism that the deflation trend is set to continue just a day after a consumer inflation for October also showed a deeper than expected slowdown.
Optimism over an ongoing slowdown in inflation continued to support bets that Fed’s rate hiking cycle is over, potentially paving the way for rate cuts as soon as the first half of next year.
Tech stocks took a breather following a rally a day earlier amid weakness in Meta Platforms, though Microsoft ended flat despite launching its own chip, Maia 100, for AI that is expected to compete with Nvidia as demand for hardware to power artificial intelligence gathers pace. NVIDIA, which closed a record high a day earlier, fell 2% to snap its 10-day winning streak.
Despite the rally being marginal, the ongoing gains in the Russell 2000 index, with the small cap index last up 0.5% a day after closing 5.4% higher, as the prospect of stalling rate hikes comforts smaller companies, which are more dependent on floating rate loans.
S&P 500 - Heatmap
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The Day Ahead
ASX SPI 7128 (-0.01%)
The ASX will likely have a mixed session early, with little offshore lead and AU employment numbers released at 1130am. The record quarterly rise in wages, highlighted in yesterdays Wage Price Index numbers would suggest the labour market remains tight and rate hikes are still not off the table for the RBA.
The small and mid-caps are likely to see some green as they bounce from heavily oversold levels, as investor sentiment improves on the huge rally in the US indicies
A2 Milk, Cettire and Mineral Resources hold annual general meetings today.
Graincorp is set to release its full-year results.
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