The Australian share market was lower today, dropping 37.70 points or 0.50% to 7,451.40, as jobs data out of the US shot down hopes of an interest rate cut early in the year.
The bottom-performing stocks were Core Lithium Ltd and Magellan Financial Group Ltd, down 17.39% and 8.03% respectively.
The index has lost 1.72% for the last five days but has risen 4.93% over the last 52 weeks.
There were no sectors in the green at the end of the day. Energy was the least-worst performer, down 0.05%, followed by Utilities (-0.08%) and Real Estate, which only lost 0.11%.
Leading the slump was Materials (-0.84%), with Consumer Staples (-0.60%) and Information Technology (-0.76%) also jostling at the bottom.
The Australian December inflation figures are out this Wednesday and hopefully, they’ll paint a brighter picture about where our economy is headed.
State Street (NYSE:STT) December indicators
In December, The State Street Risk Appetite Index rose to 0.24 from zero, showing that long-term investor flows were on balance tilted toward adding risk across asset classes.
“Despite continued concerns about global and Chinese growth in particular, institutional investor risk appetite improved again in December,” noted State Street Global Markets head of strategy Michael Metcalfe.
“Asset managers lowered their cash holdings for the second consecutive month; a constructive signal for markets as we begin 2024 given they are still overweight cash. The implication is that managers are more focused on the promise of more supportive monetary policy than the Chinese disinflation.
“The improvement in risk appetite was broad-based, with asset manager flows into cyclical sectors, high yield US corporate credit and some emerging market equities, in particular India, Indonesia and Korea.
“Demand for Chinese equities remained close to average levels. Meanwhile, demand for safe-haven assets, in particular the US dollar, continued to be reversed.”
The State Street Holdings indicators showed that long-term investors' allocations to cash fell by 0.3 percentage points to 19.9%, equity holdings benefited the most from this rising 0.2% to 51.8% while the allocation to fixed income rose by 0.1% to 28.2%.
“Asset managers begin 2024 in aggregate overweight both equities and cash, counterbalanced by underweight in fixed income securities. So, if this year does deliver slower growth, continued disinflation and eventual interest rate reductions, this should be supportive of a rebalancing back toward fixed income.
“This there is also potential upside for emerging markets as asset managers begin the year with a 1% underweight in emerging market equities and a 1.5% underweight in emerging market fixed income. This implies any move back to benchmark will result in significant inflows into emerging market assets,” added Metcalfe.
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