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12th September 2024

Morning Bell - Sam Kanaan

Overnight, Wall St closed higher as investors reacted to the latest US inflation data readings and what it could mean for the Federal Reserve policy. The Dow Jones gained 0.31%, the S&P 500 rose by 1.07% and the tech-heavy Nasdaq ended Wednesday’s trading session 2.17% higher.

In terms of US inflation data, core inflation year on year remained the same as its previous result and in line with the consensus of 3.2%. And the inflation rate year on year came in 0.2% below the forecast of 2.7% at 2.5%. Investors are now pricing in an 85% chance that the US central bank will approve a 25 basis point interest rate reduction in September, according to the CME  Group’s FedWatch measure.

Over in Europe, markets ended Wednesday’s session mixed following the release of US inflation data. The STOXX600 closed 0.02% higher after a volatile day of trading with tech stocks gaining 1.21%, whilst industrials and household good stocks fell 0.4% each. Germany’s DAX gained 0.35%, the French CAC dropped 0.14% and over in the UK the FTSE100 lost 0.15% by market close.

Locally yesterday, the ASX200 fell 0.3% lower yesterday with the majority of stocks closing in the red. Losses were led by the financial and energy sectors which dropped 1.46% and 1.41% respectively. This was offset by the materials sector which rose by 1.67%.

What to watch today:

  • The Australian share market is set to open higher, with the SPI futures suggesting a rise of 0.63% at market open this morning.
  • On the commodity front this morning,
    • Oil is trading 2.41% higher at 67 US dollars and 33 cents a barrel after hitting a near three-year low in its previous session.
    • Gold is trading 0.29% lower at 2511 US dollars an ounce and iron ore is trading over half a percent lower at 91 US dollars and 28 cents a tonne.

Trading Idea:

  • Bell Potter maintains a buy rating on Adrad Holdings (ASX:AHL) and has an unchanged 12-month price target of $1.12. Bell Potter’s valuation implies a 48.3% share price growth of the current share price of $0.75, hence the buy rating is maintained.