US stocks on track for biggest monthly gain in 2023

The S&P 500 and the Dow Jones Industrial Average ended Wednesday near the flat line, but the major averages remain on track for their biggest monthly gain in 2023.

The S&P 500 and Dow are up 8.5 per cent and 7.2 per cent, respectively, in November. The Nasdaq has climbed about 10.9 per cent over the same period.

Overnight, the 30-stock Dow was up 13.44 points, or 0.04 per cent, to close at 35,430.42. The S&P 500 ticked down by 0.09 per cent to end at 4550.58, and the Nasdaq Composite slipped by 0.16 per cent to 14,258.49.

General Motors shares popped about 9.3 per cent after the company announced a $10 billion buyback and raised its dividend, and NetApp soared 15 per cent on an earnings beat. Phillips 66′s stock jumped 4.3 per cent after Elliott Investment Management took a $1 billion stake in the energy company.

Salesforce beat earnings expectations in the third quarter, with earnings per share at $2.11 (adjusted) and revenue at $8.72 billion, meeting LSEG's forecasts. The stock rose 5 per cent in after-hours trading and has gained 79 per cent for the year, outperforming the Nasdaq's 36 per cent growth.

The yield on the 10-year Treasury note fell below 4.3 per cent for the first time since September, lending support to stock valuations.

However, US bonds are on track for their best monthly performance in almost 40 years, with the Bloomberg US Aggregate bond index rising 4.3 per cent in November, driven by expectations of Federal Reserve rate cuts next year. This could prevent a three-year losing streak, an unprecedented event in its 47-year history.

The US dollar hit a three-month low as confidence in the US Federal Reserve's potential interest rate cuts by mid-2024 grew, with Treasury yields falling. This decline was fueled by remarks from Fed policymaker Christopher Waller, suggesting that rates might not rise further and could be cut if inflation slows.

Data released Wednesday showed gross domestic product in the third quarter grew at a stronger-than-forecast annual rate of 5.2 per cent. The boost came primarily from revisions to government spending and investments in nonresidential structures.

Traders have been optimistic that the Fed’s rate-hiking cycle is over, with fed funds futures pricing reflecting a chance the central bank could cut rates as early as next spring.

The influential Organization of Petroleum Exporting Countries and its allies, collectively known as OPEC+, convene to decide next production policy steps on Thursday, in a postponed virtual meeting overshadowed by conflict in the Middle East, internal disgruntlement and the imminent expiry of a key Saudi supply cut.

All eyes have turned on whether the OPEC subset of the group — steered by heavyweight Saudi Arabia — will have mended its differences, after sources told CNBC that Angola and Nigeria objected to lower baselines for next year. Baselines, levels off which cuts and quotas are decided, have been a bone of contention within OPEC+, stalling talks amid UAE pushback in the summer of 2021.

Overall, US sectors were mixed overnight. Real Estate was the top performer, whilst Communication Services was the worst.

Futures

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

Currency

One Australian dollar at 8:25 AM was buying 66.18 US cents.

Commodities

Gold has added 0.23 per cent. Silver has gained 0.43 per cent. Copper has lost 0.20 per cent. Oil has gained 1.75 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE fell 0.43 per cent, Frankfurt gained 1.09 per cent, and Paris closed 0.24 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei fell 0.26 per cent, Hong Kong’s Hang Seng lost 2.08 per cent while China’s Shanghai Composite closed 0.56 per cent lower.

The Australian share market closed 0.29 per cent higher at 7035.35.

Ex-dividends
Aristocrat Leisure (ASX:ALL) is paying 34 cents fully franked
Metrics Income (ASX:MOT) is paying 2.06 cents unfranked
Metrics Master (ASX:MXT) is paying 1.5 cents unfranked
Pengana Int Equ Ltd (ASX:PIA) is paying 1.35 cents fully franked
Technology One (ASX:TNE) is paying 14.9 cents 60 per cent franked

Dividends payable
Bisalloy Steel Group Ltd (ASX:BIS)
Rand Mining Ltd (ASX:RND)
Copper Strike Ltd (ASX:CSE)
Acrow Ltd (ASX:ACF)
Kelly Partners Group Holdings Ltd (ASX:KPG)
Janus Henderson Group PLC (ASX:JHG)
Tribune Resources Ltd (ASX:TBR)
BlackWall Ltd (ASX:BWF)
US Student Housing REIT (ASX:USQ)

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

Disclaimer

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