The ASX200 broke through the 8,000-point ceiling for the first time yesterday, setting the stage for a new record high with more upward progress today, gaining 0.83% or 66.20 points to 8,065.50.
There was strength in almost every sector – five sectors gained more than 1% and only Energy gained less than 0.5%, managing just a 0.25% uptick.
Info Tech (+1.69%), Real Estate (+1.87%) and Industrials (1.54%) led the charge. WiseTech Global Ltd gained 4.19%, Goodman Group (ASX:GMG) 1.99% and Reece Ltd (ASX:REH) 5.35%.
Commodities went in the other direction, with base metals and oil falling between 0.36% and 2.51%. Silver, gold, platinum and palladium made gains, adding between 0.48% and 2.16%.
The index has gained 3.41% over the last five trading days to meet its 52-week high, a powerful lift that has buoyed Polynovo Limited 9.28% and James Hardie Industries PLC 5.59%, the top-performing stocks on the bourse today.
US small caps take flight; gold shines
Capital.com senior financial market analyst Kyle Rodda joins us to discuss movements in US markets and gold’s most recent run to new record highs.
“The rotation trade is underway on Wall Street and it's lifting equity valuations across the globe,” Rodda writes.
“The prospect of rate cuts in the US, combined with the unfolding Trump trade, is driving flow away from mega-cap tech stocks to more cyclical assets.
“The Russell 2000 Index, Wall Street’s benchmark for small caps, is flying, adding another 3.5% overnight.”
(Source: Trading View)
“It’s shaping up as a potential boom time for asset prices,” Rodda explains.
“Firstly, the markets are pricing in three cuts from the Fed in the next six months.
“Secondly, the markets expect a flood of fiscal support if Donald Trump wins the Presidency. While it could cause issues down the line due to the resurgence of inflation and a greater US public debt burden, the impact in the short term would be a huge wall of stimulus that could drive the US economy and support corporate profits.
“In the short term, the US economy has a Goldilocks quality. As inflation pressures subside, consumer activity looks resilient, with core Retail Sales data last night printing higher than forecast.
“This briefly stoked fears about hot demand in the US economy. However, the markets eventually fell back on the promising price data and interpreted the Retail Sales data favourably.
“The conditions for gold could not be better either. The US Dollar and yields are dropping because the markets are pricing in several rate cuts before the end of the year.
“Meanwhile, longer-run inflation expectations are ratcheting higher due to Trump’s likely fiscal stance.
“Add to that a more fraught geopolitical environment across the globe, inflamed by Trump’s likely foreign policy, and it's no surprise gold is climbing to record highs.”
(Source: Trading View)
“Inflation data continues to suggest the global inflation pulse is ebbing,” Rodda wrote.
“Canadian and New Zealand CPI undershot expectations, adding to the case for rate cuts from the Bank of Canada and RBNZ.
“FX markets were mostly unfazed by the data outside of the US, with the US Dollar dropping as the markets went risk-on amid the expectations for lower US rates.”
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