S&P500 continues its November rally

The S&P 500 soared to a closing high for 2023 on Friday, extending November’s rally into the new month.

The broad market index rose by 0.59 per cent, ending the session at 4,594.63. The tech-heavy Nasdaq Composite advanced 0.55 per cent to 14,305.03. The Dow Jones Industrial Average added 294.61 points, or 0.82 per cent, to close at 36,245.50.

The Dow rose to another new high on Friday, bringing its 2023 gain to nearly 9.4 per cent, after it notched a new 2023 high and capped off its best month in more than a year.

The S&P 500 closed at its highest level since March 2022. Stocks bringing the broad market index to these heights include Ulta Beauty and Boston Properties, which rose 10.8 per cent and 11.2 per cent, respectively. Paramount popped 9.8 per cent.

Last week, the S&P 500 added 0.77 per cent, while the Dow rallied 2.4 per cent. The Nasdaq advanced 0.38 per cent. It marked the fifth consecutive week of gains for the major averages.
This month is typically a strong one for equities, with Decembers that precede a presidential election generally delivering outsized returns.

Federal Reserve Chair Jerome Powell on Friday pushed back against the market’s expectations for interest rate cuts ahead, saying it is “premature to conclude with confidence” that monetary policy is “sufficiently restrictive.”

Traders are increasingly betting on a Federal Reserve rate cut by early next year, with a 10.11 per cent chance by January and a 56.8 per cent chance by March, despite Chairman Jerome Powell's contrary view. This anticipation has led to lower Treasury yields across various maturities.

The yield on the 10-year Treasury note fell more than 13 basis points to 4.213 per cent.

Overall, all US sectors except for Communication Services closed higher on Friday. Real Estate was the best performer.

In commodity-related news, oil prices fell more than 2 per cent as scepticism grew regarding OPEC+ production cuts, and an increase in U.S. oil rigs added to downward pressure. Despite OPEC+ efforts to boost prices with promised cuts, the West Texas Intermediate contract for January dropped 2.49 per cent to $74.07 a barrel, and the Brent crude contract for February declined 2.45 per cent to $78.88 a barrel, resulting in a 5 per cent decline since Wednesday's close.

The USA is imposing a 25 per cent cap on Chinese ownership in critical components of the battery supply chain, preventing access to IRA funds for such entities. This affects materials like LFP batteries, precursor materials, high purity manganese sulphate, graphite, and nickel

Futures

The SPI futures are pointing to a 0.9 per cent gain.

Currency

One Australian dollar at 7:35 AM was buying 66.65 US cents.

Commodities

Gold gained 1.58 per cent. Silver added 0.77 per cent. Copper gained 2.10 per cent. Oil fell 2.49 per cent.

Figures around the globe

European markets closed higher. London’s FTSE added 1.01 per cent, Frankfurt gained 1.12 per cent, and Paris closed 0.48 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei fell 0.17 per cent, Hong Kong’s Hang Seng lost 1.25 per cent while China’s Shanghai Composite closed 0.06 per cent higher.

The Australian share market closed 0.20 per cent lower at 7073.18

Ex-dividends
Collins Foods Ltd (ASX:CKF) is paying 12.5 cents fully franked
Incitec Pivot (ASX:IPL) is paying 5 cents unfranked
Stanmore Resources (ASX:SMR) is paying 8.7876 cents fully franked

Dividends payable
PharmX Technologies Ltd (ASX:PHX)

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

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