News
S&P 500 hits new record after Fed and inflation news
The S&P 500 and the Nasdaq reached historic highs, closing at new records, following the announcement of the Fed’s monetary policy and the May CPI numbers, which pointed to the relief of inflationary pressures.
The S&P 500 closed up 0.85%, ending the day with a new record of 5,421.03. The Nasdaq rose 1.53 percent, also closing at a new record high of 17,608.44. The Dow Jones once again bucked the trend and fell into the red, closing down 0.09%.
Markets were dominated by May’s Fed and CPI data. As expected, the Fed kept interest rates unchanged. The Fed also commented that progress has been made on the inflation front, although not overwhelmingly so. The Fed commented that “in recent months, there has been modest additional progress toward the Committee’s 2% inflation objective.”
The Fed’s latest projections released on Wednesday indicated that the Fed expects only one rate cut this year. That’s less than the three rate cuts expected in early 2024.
The consumer price index remained unchanged in May, lower than the Dow Jones estimate of a 0.1% monthly increase. Year over year, the inflation metric increased by 3.3 percent, which was also below expectations and represented a slowdown from the previous pace of 3.4 percent. Monthly and annual core CPI numbers, which exclude volatile energy and food prices, were also lower than expected.
Following the CPI report, the yield on the 10-year US Treasury note initially fell but later slowed its decline after Fed Chairman Jerome Powell emphasized ongoing concerns about inflation. Ultimately, the yield was expected to end the day down 7 basis points at 4.33%, having previously fallen to 4.25%, the lowest level since April 1.
In company-related news, technology leaders Apple and Nvidia emerged. Apple’s gains helped it overtake Microsoft as the world’s most valuable publicly traded company, while Nvidia rallied as enthusiasm for artificial intelligence deepened.
Turning to US sectors, following gains from Nvidia and Apple, the technology sector was the best performer, closing 2.5% higher. Energy performed worst, followed by consumer staples and then utilities
Futures
SPI futures point to a 0.7% gain.
Coin
One Australian dollar at 7:30am was buying 66.64 US cents.
goods
Gold added 1.21 percent. Silver gained 3.54 percent. Copper rose 1.46%. Oil gained 0.77 percent.
Figures around the globe
European markets closed higher. London’s FTSE rose 0.83 percent, Frankfurt gained 1.42 percent and Paris closed up 0.97 percent.
As for Asian markets, Tokyo’s Nikkei fell 0.66 percent, Hong Kong’s Hang Seng lost 1.31 percent, while China’s Shanghai Composite closed up 0.31 percent.
Yesterday, the Australian share market closed 0.51 percent lower at 7,715.51.
Ex-dividends
Champion Ferro Ltda (ASX:CIA) is paying 11.0241 cents without deductible
Incitec Pivot (ASX:IPL) is paying 4.3 cents without deductible
Plato Inc Max Ltda (ASX:PL8) is paying 0.55 cents fully franchised
WCM Global Growth (ASX:WQG) is paying 1.74 cents fully franchised
Dividends payable
Dalrymple Bay Infrastructure Ltd (ASX:DBI)
Hancock & Gore Ltd (ASX:HNG)
ResMed Inc. (ASX:RMD)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
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