United States
Wall Street extended its record-setting run, with the S&P 500 up 0.3% to close above 6500 for the first time and the Nasdaq gaining 0.5%, while the Dow added 0.2%. A stronger growth pulse—Q2 GDP was revised to a 3.3% annualised pace—kept recession fears at bay without fully unsettling hopes for policy easing. Communication services led seven of the 11 sectors higher as investors stuck with cash-generative platforms and ad-supported media. Market breadth improved modestly, with cyclicals participating, though megacap tech still set the tone. Nvidia dipped 0.8% as upbeat target hikes from analysts jostled with uncertainty around US approval to resume shipments to China; the stock’s pause did little to derail broader AI enthusiasm. Bonds were steady-to-firmer at the long end, the 10-year holding near 4.20% as traders looked ahead to tonight’s core PCE inflation report for confirmation that disinflation remains intact. The VIX eased to 14.43, consistent with a constructive risk backdrop and supportive of momentum into month-end.
Europe
European equities were mixed, with the Stoxx 600 slipping 0.2% as sector moves told a two-speed story. Autos outperformed after a brisk pickup in car sales buoyed sentiment across the supply chain, while basic resources advanced alongside firmer iron ore, nudging the miners to a one-month high. Those gains were offset by weakness in rate-sensitive pockets: real estate and utilities lagged as investors reassessed the path of European borrowing costs and regulatory headlines pressured individual names. Telcos underperformed after deal chatter fizzled in parts of the market, while luxury shares extended recent gains on hopes that demand is stabilising into the northern autumn. With traders awaiting preliminary August CPI prints from France and Germany later today, the region remains range-bound—supported by improving goods demand but capped by stickier service inflation and cautious earnings guidance.
Australia
Local shares are set for a softer start, with SPI/ASX 200 futures indicating a fall of about 30 points (-0.3%) into the final day of reporting season. The global tone is broadly risk-positive—US indices at highs and European cyclicals showing some spark—but domestic trade may be more selective as investors balance earnings revisions with macro catalysts. Materials could find a tailwind from iron ore near US$104.50 a tonne and a slightly weaker US dollar, while energy may draw support from steady crude. Growth-exposed tech is likely to track the Nasdaq’s lead, though any back-up in yields could see intraday swings.
Beyond resources and tech, watch the banks and interest-rate sensitives. Major lenders typically trade with the curve; any shift in bond yields ahead of tonight’s US core PCE could sway margins-and-multiples sentiment. REITs and defensives may face a tug-of-war between firm equity risk appetite and sensitivity to rates, while healthcare’s global revenue mix makes it a default shelter if volatility picks up. Consumer discretionary names will take their cue from the AUD’s grind higher and cost-of-living narratives; stable fuel prices help sentiment, but households remain price-aware, making guidance tone pivotal.
On the micro side, results and updates from names such as Virgin Australia, plus headlines across consumer and infrastructure, will shape stock-specific moves. Elsewhere, company newsflow includes a sharp turnaround at Austal, with profit up 503%, while Cettire swung to a full-year loss and PEXA lifted revenue but reported a bottom-line loss—reminders that top-line resilience does not always translate to earnings in a higher-cost environment. With reporting season closing out, expect dispersion to stay elevated as the market digests guidance quality, dividend/buy-back intentions, and cash-flow credibility heading into spring. July private-sector credit lands at 11:30am AEST; offshore, US personal spending and the core PCE deflator at 10:30pm AEST remain the day’s key macro swing factors.
Commodities and currencies
Crude oil is little changed after a choppy week, with Brent around US$68.33 a barrel and traders weighing geopolitics against still-ample inventories. Gold firmed 0.6% to about US$3,417 an ounce, reflecting a push-pull between resilient US growth and expectations the Fed can still deliver additional easing by year-end if inflation permits. In bulk and base, iron ore’s 2% rise to roughly US$104.50 supports both European miners and Australia’s materials complex at the open. The US dollar softened at the margin, allowing the Australian dollar to edge up 0.4% to about US65.31¢; AUD-sensitive importers and retailers will keep an eye on tonight’s PCE print for the next USD cue. In rates, 10-year government bond yields hover near 4.20% in the US and 4.28% in Australia, levels that keep equity valuations under gentle pressure but have been well telegraphed. Crypto remains a sideshow for broader risk: bitcoin added 0.2% to about US$112,011, a modest lift that underscores steady risk appetite without meaningfully driving cross-asset flows.
Economic Calendar
US:
- Personal Income July 22:30
- Personal Spending July 22:30
- Core PCE Price Index 22:30
- Wholesale Inventories MoM 22:30
- MNI Chicago PMI 23:45
AU:
- Private Sector Credit MoM/YoY 11:30
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
