Daily Market Reports | 8:51 AM
This story features MYER HOLDINGS LIMITED, and other companies. For more info SHARE ANALYSIS: MYR
| World Overnight | |||
| SPI Overnight | 8373.00 | + 25.00 | 0.30% |
| S&P ASX 200 | 8378.70 | – 51.10 | – 0.61% |
| S&P500 | 6118.71 | + 32.34 | 0.53% |
| Nasdaq Comp | 20053.68 | + 44.34 | 0.22% |
| DJIA | 44565.07 | + 408.34 | 0.92% |
| S&P500 VIX | 15.02 | – 0.08 | – 0.53% |
| US 10-year yield | 4.64 | + 0.04 | 0.85% |
| USD Index | 107.91 | – 0.13 | – 0.12% |
| FTSE100 | 8565.20 | + 20.07 | 0.23% |
| DAX30 | 21411.53 | + 157.26 | 0.74% |
Good morning.
Freshly inaugurated US President went to the annual Davos gathering and demanded a drop in interest rates –globally, not only in the USA– and weaker oil prices, directing his command at Saudi Arabia and OPEC.
Yes, if only life was that easy
Has anyone yet tried to explain to the President that lower oil prices don’t suit his ambition to activate more drilling activity from US energy companies?
Global geopolitics has quickly turned into the era of bullies, or so it appears.
Market commentators are suggesting the stand-out observation thus far is Trump’s more moderate comments regarding China, which is supporting a positive undertone for equity markets.
SPI futures are signaling a positive start ahead for the Aussie market ahead of what will be a long weekend (Australia Day).
In sharp contrast with the past few days, the corporate calendar looks quite empty. The Bank of Japan is widely expected to hike interest rates today.
The Norgesbank kept its rate on hold at 4.5% but market commentary explicitly guides to a March rate cut.
Global equities kept a positive mood overnight but yet again rising bond yields kept a lid on the overall enthusiasm. The yield on the US 10y bond rose 2.9bp to 4.64%.
The USD traded slightly softer. The AUD rose 0.1% to 0.6285, as did the NZD +0.1% to 0.5674.
WTI fell -0.7% to US$74.9/bbl (see Trump, apparently). Gold rose 0.2% to US$2,756/oz.
Base metals extended recent declines as the market mulls over Trump’s threats to enact tariffs. Earlier this week he warned of 10% tariffs on all imports from China from as early as next month.
This came a day after his announcement that he may enact tariffs of as much as 25% on Mexico and Canada from February.
As noted by ANZ Bank commentary, copper escapes the broad selloff across the sector as supply side issues arose.
Freeport-McMoRan Inc, the world’s third biggest copper producer said it missed sales projections and warned first quarter output would slump due to plant maintenance and setbacks in Indonesia.
By Rania Gule, Senior Market Analyst at XS.com
Amid recent developments in global financial markets, the S&P500 index stands out as one of the most important indicators reflecting the health of the U.S. economy and global investment trends.
Recently, the index reached an all-time high of 6,105 points, driven by a surge in technology stocks, underscoring investor confidence in a sector that remains a key driver of economic growth.
In my view, this rise is not a fleeting event but the result of several intertwined economic and political factors, ranging from strong earnings reports by major corporations to optimism surrounding the new policies of President Donald Trump.
One of the primary factors contributing to this upward trend is the robust performance of tech giants like Oracle and NVIDIA, whose stocks rose by 6% and 4%, respectively.
I believe this increase is fueled by growing interest in artificial intelligence, particularly following the White House’s announcement of the “Stargate” project, which aims to invest US$500bn in AI infrastructure.
This massive initiative, involving companies like OpenAI, Oracle, and SoftBank, reflects a strategic shift toward bolstering technological innovation, giving investors greater confidence in the future of this sector.
Additionally, the strong performance of companies like Apple, which saw gains of around 2%, and Netflix, whose shares jumped over 9%, reaffirms that the technology sector remains a major growth engine in financial markets.
On the other hand, optimism about President Trump’s new economic policies plays a significant role in driving the index to record levels. Investors anticipate the Trump administration will ease regulatory restrictions and reduce corporate taxes, potentially boosting profits and stimulating economic growth.
These expectations, coupled with data indicating easing inflation and stable interest rates, create a favourable environment for continued market growth.
Moreover, the strong performance of companies like Procter & Gamble, which contributed to a 1.28% rise in the Dow Jones Industrial Average, highlights the diversity of growth sources in the U.S. economy.
However, this upward trend is not without challenges.
In late 2024, the index experienced a -2.5% decline due to investor concerns that the Federal Reserve might not cut interest rates as much as expected.
These concerns persisted into early 2025, but recent data pointing to easing inflation has helped restore market confidence. This improvement reflects the resilience of the U.S. economy and its ability to adapt to economic challenges, reinforcing investor expectations of further gains in the future.
In conclusion, I believe that current indicators suggest the bullish market for the S&P500 could continue to rise, especially with ongoing support from the technology sector and new economic policies.
However, investors should remain cautious of potential volatility, particularly in light of geopolitical and economic challenges that could impact global markets. The increasing focus on artificial intelligence and technology may create new investment opportunities but also carries risks associated with rapid changes in this sector.
Therefore, it seems to me that the S&P500 is on track to achieve further gains, supported by the strong performance of the technology sector and new economic policies.
Nonetheless, the success of this trend depends on the U.S. economy’s ability to maintain its momentum and sustain investor confidence amid potential challenges.
On the calendar today:
-Japan BoJ decision
-Japan Dec CPI
-UK Jan Consumer Sentiment
-US Jan Consumer Sentiment
-Global PMIs
-Myer ((MYR)) ex-div 2.5c (100%)
FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/
Corporate news in Australia:
-Synlait Milk ((SM1)) has stated the company will “return to profitability” this year
-ASIC’s private credit probe exposes hidden fees and trustee conflicts
-Monadelphous ((MND)) wins $150m Rio Tinto ((RIO)) contracts for construction and water management
-Earlypay ((EPY)) is seeking a buyer
-Mosaic Brands ((MOZ)) is closing down its seventh label, Rivers
-ASX ((ASX)) issues $1m rebates related to last year’s CHESS outage
| Spot Metals,Minerals & Energy Futures | |||
| Gold (oz) | 2761.29 | – 6.30 | – 0.23% |
| Silver (oz) | 30.83 | – 0.56 | – 1.79% |
| Copper (lb) | 4.33 | + 0.03 | 0.75% |
| Aluminium (lb) | 1.18 | – 0.00 | – 0.15% |
| Nickel (lb) | 7.01 | – 0.12 | – 1.65% |
| Zinc (lb) | 1.28 | – 0.02 | – 1.70% |
| West Texas Crude | 74.25 | – 1.22 | – 1.62% |
| Brent Crude | 77.91 | – 1.08 | – 1.37% |
| Iron Ore (t) | 101.34 | – 0.06 | – 0.06% |
By deVere Group CEO, Nigel Green
Global financial advisory giant deVere Group is issuing a stark warning to investors to prepare for significant turbulence as the Federal Reserve may find itself at odds with the economic consequences of President Trump’s fiscal policies.
Growing inflationary pressures are likely to reappear, and the Fed’s potential response could signal a seismic shift in financial markets.
Since taking office, President Trump has doubled down on his ambitious fiscal stimulus agenda, tax cuts, and an expansive tariff regime.
While these measures aim to stimulate economic growth, they have also reignited concerns about inflationary pressures, which remain stubborn.
This potential battle is not unprecedented. During Trump’s previous presidency, his frequent clashes with the Fed over monetary policy were well-documented.
In 2018 and 2019, the former president openly criticized the central bank for raising interest rates, which he argued stifled economic growth.
Trump’s unconventional approach included publicly pressuring the Fed to lower rates and adopt a more dovish stance. While some saw this as a way to support his administration’s pro-growth agenda, others viewed it as a challenge to the Fed’s independence.
The battle lines are likely already being drawn between the Fed and the White House, and investors should prepare for the fallout.
President Trump’s policies are creating the perfect storm of inflationary pressures, and the Fed may have no choice but to act. This could trigger significant market volatility.
The central bank has historically used interest rate hikes as a tool to combat inflation, but doing so in a period of fiscal stimulus could choke growth and unsettle markets.
Adding fuel to the fire, Trump’s protectionist trade policies have already driven up costs for businesses reliant on global supply chains. Tariffs on essential goods and materials have contributed to higher prices, which are now being passed on to consumers.
This has amplified inflationary pressures, placing the Fed in an increasingly difficult position.
The Fed may feel compelled to raise rates to rein in inflation, which has already proven to be remarkably sticky.
But higher interest rates would be expected to slow the economy, impact corporate profits, and shake investor confidence. This is a delicate balancing act with no easy solutions.
The stakes are high for investors preparing for this new economic reality. Asset classes that thrived in a lower-interest-rate environment may now face headwinds. Meanwhile, risk-sensitive currencies could experience heightened volatility as markets adjust to the Fed’s moves.
deVere is urging clients to reassess their portfolios to ensure they are robust enough to withstand potential market disruptions.
A diversified strategy, incorporating inflation-hedging assets such as commodities, as well as a focus on high-quality equities and structured products will be key to managing this challenging environment.
Investors must be proactive, not reactive. Those who take decisive action now will be better positioned to capitalize on opportunities and mitigate risks in what promises to be a highly volatile period.
The potential fallout of a Fed-Trump policy clash is not limited to the US. The effects would be felt across global markets, particularly in emerging economies.
Countries with high dollar-denominated debt are especially vulnerable to rising US interest rates, which could increase borrowing costs and destabilize currencies.
Emerging markets are typically the first to feel the impact of tighter US monetary policy. Investors should remain vigilant about exposure to these regions and consider strategies to mitigate potential risks.
This is a time for vigilance and preparation.
The Australian share market over the past thirty days
| Index | 23 Jan 2025 | Week To Date | Month To Date (Jan) | Quarter To Date (Jan-Mar) | Year To Date (2025) |
|---|---|---|---|---|---|
| S&P ASX 200 (ex-div) | 8378.70 | 0.82% | 2.69% | 2.69% | 2.69% |
| BROKER RECOMMENDATION CHANGES PAST THREE TRADING DAYS | |||
| ANZ | ANZ Bank | Upgrade to Neutral from Underperform | Macquarie |
| CPU | Computershare | Downgrade to Neutral from Buy | Citi |
| CVN | Carnarvon Energy | Downgrade to Hold from Buy | Ord Minnett |
| CXL | Calix | Downgrade to Speculative Hold from Speculative Buy | Bell Potter |
| EVN | Evolution Mining | Downgrade to Neutral from Buy | Citi |
| Downgrade to Underperform from Neutral | Macquarie | ||
| GDG | Generation Development | Upgrade to Add from Hold | Morgans |
| HMC | HMC Capital | Upgrade to Buy from Hold | Bell Potter |
| HUB | Hub24 | Upgrade to Buy from Hold | Ord Minnett |
| ILU | Iluka Resources | Downgrade to Neutral from Buy | Citi |
| NAB | National Australia Bank | Upgrade to Neutral from Underperform | Macquarie |
| NWL | Netwealth Group | Upgrade to Neutral from Sell | Citi |
| VMM | Viridis Mining and Minerals | Upgrade to Buy from Hold | Ord Minnett |
For more detail go to FNArena’s Australian Broker Call Report, which is updated each morning, Mon-Fri.
All overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX and more available on the FNArena website. Click here. (Subscribers can access prices on the website.)
(Readers should note that all commentary, observations, names and calculations are provided for informative and educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions. All views expressed are the author’s and not by association FNArena’s – see disclaimer on the website)
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