Market Update: 25 June 2024
This week, the Australian stock market showed positive momentum, with the ASX 200 closing up 0.9%. This uptick comes as the Reserve Bank of Australia (RBA) maintained its cash rate target at 4.35%, in line with expectations. However, the RBA’s guidance took a more hawkish tone, highlighting stronger-than-expected household consumption and potential inflation risks. Notably, Governor Bullock mentioned that the Board had considered a rate hike for the first time in the current cycle. Despite this, our outlook remains that there will be no cuts this year. Among the sectors, Utilities and Financials led the gains, while Materials, Technology, and Industrials underperformed.
In the United States, the stock market experienced a mixed performance. The Dow Jones and S&P 500 ended the week up 1.5% and 0.6%, respectively, while the Nasdaq remained flat. A softer retail sales print for May, rising only 0.1% against an expected 0.3%, supported the soft-landing narrative and raised hopes for a potential September rate cut. In the Tech sector, Nvidia surpassed Microsoft to become the world’s largest company, further highlighting the dynamic shifts within the market.
European markets recovered from last week’s selloff, with major indices such as the Euro Stoxx 50 and FTSE closing in the green. The UK saw inflation fall to the Bank of England’s (BoE) 2% target for the first time in nearly three years, prompting the BoE to hold rates steady while indicating possible future cuts. Political events are set to increase market volatility in the coming week, including the Trump/Biden debate and France’s election round. In Asia, the Hang Seng index saw modest gains, while the Shanghai Composite faced a downturn due to weaker-than-expected industrial data. Japan’s Nikkei was slightly down, influenced by uncertainties surrounding the Bank of Japan’s monetary policy.
Published 25/6/2024
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