Record-breaking S&P 500 defies seasonal trends

The S&P 500 narrowly edged higher overnight, reaching a new all-time high as investors eagerly awaited the Federal Reserve's interest rate decision.

The broad market index closed up 0.03 per cent at 5,634.58, after touching a record intraday high of 5,670.81. The Dow Jones Industrial Average slipped slightly, down 15.9 points or 0.04 per cent, to 41,606.18. The Nasdaq Composite gained 0.2 per cent, ending the day at 17,628.06.

Turning to US sectors, they were mixed overnight. Energy, Consumer Discretionary and Industrials were the biggest gainers, whilst Health was the worst performer.

Intel shares surged 2.7 per cent after the company announced plans to spin off its foundry business. Additionally, the Biden administration awarded Intel up to $3 billion in funding through the CHIPS Act.

Hewlett Packard Enterprise's stock rose 6 per cent due to a favourable upgrade from Bank of America.

Gannett's stock surged 16 per cent following a positive upgrade from Citi. Accenture's shares declined by 4 per cent after news of a potential shift in promotion timing.
The US Department of Transportation has approved Hawaiian Holdings' $1.9 billion merger with Alaska Airlines, sending Hawaiian's shares up by nearly 4 per cent.
Despite the market's recent strength, September remains a historically challenging month for stocks. Over the past decade, the S&P 500 has averaged a 1.3 per cent decline in September.

Investors have navigated late-summer volatility stemming from concerns about the US economy. Weak jobs and manufacturing data in August led to a sharp sell-off, but equities have rebounded amid more positive economic indicators and expectations of a Fed rate cut.

Wall Street is keenly focused on the Fed's highly anticipated rate cut announcement on Wednesday afternoon. A rate cut could provide a boost to corporate earnings, which have been pressured by high borrowing costs and inflation. The Fed began raising interest rates aggressively in March 2022.

Recent retail sales data suggested a healthy consumer spending environment. Retail sales rose 0.1 per cent in August, slightly exceeding economists' expectations.

While investors widely expect a rate cut, there is uncertainty regarding the size of the reduction. Traders are currently pricing in a 63 per cent probability of a 50-basis-point cut, according to CME Group's FedWatch Tool. A larger-than-expected cut could raise concerns about the economic outlook.

Futures

The SPI futures are pointing to a 0.5 per cent fall.

Currency

One Australian dollar at 7.20am was buying 67.56 US cents.

Commodities

Gold lost 0.63 per cent. Silver fell 0.50 per cent. Copper lost 0.01 per cent. Oil gained 1.57 per cent.

Figures around the globe

European markets closed higher. London’s FTSE added 0.38 per cent, Frankfurt gained 0.50 per cent, and Paris closed 0.51 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei lost 1.03 per cent, Hong Kong’s Hang Seng added 1.37 per cent, while China’s Shanghai Composite closed 0.48 per cent lower.

Yesterday, the Australian share market closed 0.24 per cent higher at 8141.

Ex-dividends
Adrad Holdings (ASX:AHL) is paying 1.61 cents fully franked
Flight Centre Travel (ASX:FLT) is paying 30 cents fully franked
Sports Entertainment Group (ASX:SEG) is paying 2 cents fully franked
Auckland International Airport (ASX:AIA) is paying 5.9242 cents unfranked
Supply Network (ASX:SNL) is paying 33 cents fully franked
Service Stream (ASX:SSM) is paying 2.5 cents fully franked

Dividends payable
APA Group (ASX:APA)
Australian Ethical Investment Ltd (ASX:AEF)
Challenger Ltd (ASX:CGF)
Codan Ltd (ASX:CDA)
Coronado Global Resources Inc (ASX:CRN)
Ebos Group Ltd (ASX:EBO)
Infomedia Ltd (ASX:IFM)
Lendlease Group (ASX:LLC)
Lynch Group Holdings Ltd (ASX:LGL)
MA Financial Group Ltd (ASX:MAF)
Nickel Industries Ltd (ASX:NIC)
Pengana Capital Group Ltd (ASX:PCG)
Stanmore Resources Ltd (ASX:SMR)

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

Disclaimer

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