S&P 500 closes above 5,500 for the first time

All three major indices rallied and bond yields fell after Federal Reserve chairman Jerome Powell said the disinflationary path is intact, opening the door to a pivot to rate cuts later this year.

The S&P 500 added 0.62 per cent finishing above the 5,500 level for the first time ever. The Nasdaq closed 0.84 per cent higher and the Dow Jones added 0.41 per cent on the day.

Trading volumes are expected to be light in the lead up to the 4th July holiday. The New York Stock Exchange will close early at 1 p.m. ET on Wednesday and will be shut on Thursday for Independence Day.

Fed comments from Powell were the key focus on the day. Fed Chairman Powell commented that the US economy has made “quite a bit of progress” back towards the Fed’s 2 per cent inflation target. The Fed Chair also added “We want to be more confident that inflation is moving sustainably down toward 2 per cent before we start the process of loosening policy.”
Treasury yields eased following Powell’s comments, with the US 10 year yields fell 4 bps to 4.436 per cent.

In company news, Electric Vehicle giant Tesla reported quarterly delivery numbers which showed deliveries had fallen again, however, they fell less than consensus expectations which saw the stock close 10 per cent higher on the day.

Nvidia shares fell 1.3 per cent, as discussion turns to whether the AI giant can continue its stellar performance into the second half of the 2024.

In commodities news the World Gold Council announced that they expect the gold market to see a range bound performance from its current levels in H2/2024 after gaining good momentum in H1/2024. The conclusion was reached following an analysis of the four main drivers of gold including opportunity cost, economic expansion, risk & uncertainty, and momentum.

Turning to US sectors, the best performer was Consumer Discretionary which closed up 1.81 per cent. The worst performer was Healthcare which finished 0.4 per cent lower.

In European news, headline inflation in the euro area fell to 2.5 per cent in June, in line with consensus expectations of economists polled by Reuters. However, the closely watched figures for core and services inflation remained stubbornly high, holding at 2.9 per cent and 4.1 per cent, respectively.

Turning to local markets, investors will be looking to Retail Sales and Building Approvals for May which are due out at 11.30am AEST today.

Futures

The SPI futures are pointing to a 0.3 per cent gain.

Currency

One Australian dollar at 7.30am was buying 66.66 US cents.

Commodities

Gold has lost 0.24 per cent. Silver has gained 0.15 per cent. Copper has added 0.02 per cent. Oil has lost 0.68 per cent.

Figures around the globe

European markets closed lower. London’s FTSE lost 0.56 per cent, Frankfurt fell 0.69 per cent, and Paris closed 0.30 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei gained 1.12 per cent, Hong Kong’s Hang Seng added 0.29 per cent while China’s Shanghai Composite closed 0.08 per cent higher.

Yesterday, the Australian share market closed 0.42 per cent lower at 7,718.17.

Ex-dividends
GrainCorp (ASX:GNC) is paying 24 cents fully franked
Qualitas Re Income (ASX:QRI) is paying 1.1672 cents unfranked

Dividends payable
Orica Ltd (ASX:ORI)
National Australia Bank Ltd (ASX:NAB)
Champion Iron Ltd (ASX:CIA)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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