Dow hits new record as rotation into smaller companies continues

Markets continued their move upwards with the Dow Jones hitting a new record following the assassination attempt on former President Donald Trump, as investors took the view that the weekend’s political events will lead to big gains for the Republican Presidential candidate and the GOP at the polls in November. A Trump and Republican victory in November is seen as a positive, with the expectation of friendlier fiscal policies.

The Dow jumped 210 points, or 0.53 per cent to a record 40,211. The S&P 500 hit new intraday highs eventually closing 0.28 per cent higher. The Nasdaq added 0.4 per cent on the day.

Turning to US sectors, the best performer was Energy which rose 1.56 per cent. The worst performing sector was Utilities which closed 2.39 per cent lower.

All eyes now turn to the Republican National Convention which kicked off in Milwaukee today as polls point to a likely Trump victory over President Joe Biden in November.

Small caps continued their rally with the Russell 2000 small companies index adding 1.8 per cent on the day and touching its highest level since 2022. Investors see a second Trump term as a boost for the smaller end of town citing their strong record after his victory in 2016.

The energy sector jumped higher on Monday as shares of APA, Halliburton, Baker Hughes and SLB all rose by more than 3 per cent. The financial sector was the second strongest sector on the day, with Discover Financial Services, Capital One Financial Corp and Synchrony Financial all also rallying more than 3 per cent.

Tesla shares rallied over 1.7 per cent which was driven by a surge in Bitcoin on expectations a Trump victory in November is likely to see a more favourable regulatory environment for cryptocurrencies.

Goldman Sachs stock surged 2.6 per cent after delivering earnings ahead of consensus expectations. The Goldman results are the first of more than 40 S&P 500 companies that are expected to report second quarter earnings later this week as earnings season ramps up. Other key names due to report this week include Bank of America, United Airlines and Netflix.

Futures

The SPI futures are pointing to a 0.1 per cent fall.

Currency

One Australian dollar at 7.30am was buying 67.61 US cents.

Commodities

Gold has added 0.34 per cent. Silver has fallen 0.73 per cent. Copper has dropped 1.45 per cent. Oil has lost 0.36 per cent.

Figures around the globe

European markets closed lower. London’s FTSE fell 0.85 per cent, Frankfurt lost 0.84 per cent, and Paris closed 1.19 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei was closed, Hong Kong’s Hang Seng lost 1.52 per cent while China’s Shanghai Composite closed 0.09 per cent higher.

Yesterday, the Australian share market closed 0.73 per cent higher at 8017.62.

Ex-dividends
Metcash Limited (ASX:MTS) is paying 8.5 cents fully franked

Dividends payable
Garda Property Group (ASX:GDF)

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