Australian shares are tipped to soar today, with futures trading 100 points higher, up 1.21% this morning.
The Aussie markets are tracking strong gains on Wall Street after the US Federal Reserve cut the federal funds rate by 25 basis points to a target range of 4.50%-4.75%, in line with market expectations.
Powell stands firm
Federal Reserve Chair Jerome Powell, meanwhile, confirmed he would not step down if asked by President-elect Donald Trump, saying his role is legally protected.
Powell did not rule out or confirm another rate cut in December, citing dependence on evolving economic conditions.
This didn’t bother the markets, which extended the post-election sugar rush, with the S&P 500 index up 0.7% and nearing the 6,000-point milestone.
The Nasdaq index gained 286 points, or 1.5%, closing at a record high.
The Dow Jones index, however, finished broadly flat, weighed down by a 4.3% drop in JPMorgan Chase (NYSE:JPM), which pulled down the financial sector by 1.6%.
Leading megacap stocks saw significant gains, with Meta Platforms up 3.4%, Apple (NASDAQ:AAPL) rising 2.1%, and Nvidia adding 2.3%.
Lyft (NASDAQ:LYFT) shares surged 22.9% on a strong outlook, while Warner Bros Discovery soared 11.8% after posting a surprise third-quarter profit.
Pharmaceutical (TADAWUL:2070) firm Viatris also jumped 13.5%, reaffirming its revenue forecast.
In domestic corporate news, telecommunications giant Optus received a A$12 million fine from the Australian Communications and Media Authority (ACMA) after failing to conduct welfare checks for over 2,100 customers disconnected from the triple-zero (000) emergency service.
Europe more cautious
European markets showed mixed performance, with the basic resources index climbing 3.5% — its strongest day in six weeks — buoyed by rebounding base metal prices.
The FTSEurofirst 300 index rose 0.6%, while London's FTSE 100 declined 0.3%.
Sweden's Riksbank cut its key rate by 50 basis points to 2.75%, whereas Norway's Norges Bank held rates at 4.50%.
The Bank of England reduced rates by 25 basis points to 4.75% but projected higher inflation following the UK’s recent budget announcement.
In economic data, US initial jobless claims edged up by 3,000 to 221,000, while nonfarm productivity rose 2.2% in Q3, missing the 2.5% forecast.
US Treasury yields declined, with the 10-year yield down by nine basis points to 4.33% and the two-year yield easing seven basis points to 4.20%.
Currencies and commodities
The US dollar weakened against major currencies, with the Euro rising from US$1.0737 to US$1.0824, ending near US$1.0800.
The Aussie dollar lifted from 66.17 US cents to 66.87 US cents and closed around 66.80 US cents, while the Yen strengthened from JPY154.28 to JPY152.86 per US dollar, settling near JPY152.90.
Global oil prices gained almost 1% as markets speculated on the president-elect’s likely favourable fossil fuel policies, while drillers reduced output in preparation for Hurricane Rafael.
Brent crude climbed 71 US cents, or 0.9%, to US$75.63 per barrel, with US Nymex crude up 67 US cents, or 0.9%, at US$72.36 per barrel.
Base metals rebounded, with copper futures rising 4.4% as markets weighed the implications of Trump’s election victory and anticipated more Chinese stimulus.
Aluminium futures rose 4.1%.
Gold futures closed up US$29.50, or 1.1%, at US$2,705.80 per ounce, bolstered by the US dollar's retreat and the Federal Reserve's rate cut.
Spot gold traded near US$2,707 per ounce at the US close.
Iron ore futures gained US$1.21, or 1.2%, to US$105.22 per tonne, with hopes of stronger policy measures from China.
On the horizon, Reserve Bank of Australia (RBA) Assistant Governor (Financial System) Brad Jones will address the financial system in an upcoming speech.
ASX-listed companies ANZ, Arcadium Lithium, Block, News Corp (NASDAQ:NWSA), NexGen Energy (TSX:NXE) and REA Group are expected to release earnings, while China’s inflation data is due on Saturday.
US consumer confidence figures are also set for release, alongside earnings from Canopy Growth (NASDAQ:CGC), Icahn Enterprises (NASDAQ:IEP) and Sony (NYSE:SONY).