This is our weekly market update, starting in the US, then Europe, Asia and Australia and covering commodities and crypto.
This week, hopes of US interest rate cuts before the end of the year rose after data this week showed that inflation was cooling faster than expected, has muddied the waters, though all three US benchmarks powered higher, despite results from three major banks, which disappointed for different reasons. MSCI's gauge of stocks across the globe rose 0.78, hitting another record intraday high.
The S&P 500 and Dow surged to all-time highs before giving up much of those gains by the close. So far this year, the Dow has risen 6.4%, underperforming the broader S&P 500 and the tech-heavy Nasdaq Composite, which have advanced 18.2% and 23.1%, respectively, over the same period. The S&P 500 was recently trading at 21.4 times forward earnings, compared to a historical average of 15.7, so its probably way over-valued!
Banks got hit at the start of the US earnings season after reports from JPMorgan, Citigroup and Wells Fargo. Wells Fargo slumped 6 per cent after warning it won’t be able to whittle away costs as fast as forecast, after the lender missed estimates for quarterly interest income. JPMorgan missed on a few key metrics like net interest income - despite posting record profit from by rising investment banking fees. However, shares of the world's largest bank dipped 1.2%. Citigroup said costs for the year are likely to be at the high end of the range previously provided and fell 1.8% despite reporting a surge in investment banking revenue.
In Australia, the flagship S&P/ASX 200 Index gained 0.9 per cent, to a record 7959.3 points, to finish the week up 1.2 per cent. In the final session of the week, the market was helped higher by Australia’s largest bank, CBA which added 1.3 per cent to $131.66, extending a bull run that has sent shares up more than 30 per cent in 12 months. As CBA ended the day with a $220.3 billion market cap, it surpassing BHP’s $220.1 billion capitalisation. The latter finished the day 0.37 per cent lower at $43.40 after informing the market late on Thursday that it would suspend nickel mining operations in Western Australia. Friday marked the first time that CBA has overtaken BHP as Australia’s most valuable public company since November 2021.
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