United States
Wall Street crept higher on Friday, though the session lacked conviction as traders positioned themselves ahead of this week’s Federal Reserve decision. The S&P 500 added 0.2 per cent to close at 6,870.40, leaving it tantalisingly close to October’s all-time high. The Nasdaq 100 fared slightly better with a 0.4 per cent gain, while the Dow Jones Industrial Average also ticked up 0.2 per cent.
For the week, the Nasdaq 100 advanced 1 per cent, though the Russell 2000 pulled back from Thursday’s record closing level. It was a more painful week for Treasuries, which posted its worst performance since June. The 10-year yield climbed roughly four basis points to settle at 4.14 per cent.
The September reading of the Fed’s preferred inflation gauge provided some comfort for rate cut expectations. Core personal consumption expenditures rose 0.2 per cent for the month, matching economist forecasts and marking the third consecutive month at that level. Year-over-year, the figure remains just below 3 per cent, suggesting inflation is stable but proving stubborn.
Swap markets continue to price in a rate cut at Wednesday’s meeting, with further easing expected through 2026. Not everyone is convinced the December cut is a certainty, however. BlackRock’s Chief Investment Officer of Global Fixed Income, Rick Rieder, told Bloomberg Television he expects some dissent and disagreement among Fed officials.
In corporate news, technology sentiment got a lift after Nvidia partner Hon Hai Precision Industry reported strong sales. Chinese AI chipmaker Moore Threads Technology soared as much as 502 per cent in its Shanghai debut after raising 8 billion yuan in its initial public offering. Netflix shares slipped following news of an agreed acquisition of Warner Bros. Discovery, a deal that would combine the streaming giant with one of Hollywood’s most storied studios.
The crypto market continued to struggle, with Bitcoin falling 3 per cent to around $89,400 after dropping below $90,000 during the session. BlackRock’s iShares Bitcoin Trust is on track for a sixth consecutive week of net outflows, having seen more than $2.7 billion in redemptions over the five weeks to late November.
Europe
European stocks finished the week essentially flat, with the Stoxx 600 closing marginally lower as investors digested the US inflation data.
It was a tale of winners and losers across sectors. Automotive stocks posted their best week since April, boosted by a string of upgrades. BMW climbed 3.5 per cent, Mercedes-Benz added 2 per cent, and Stellantis gained 2.3 per cent following an upgrade. Retail was another bright spot, with Inditex enjoying its best week in years on the back of strong results.
The energy sector lagged as major players copped downgrades. BP fell 2.6 per cent after Bank of America cut its rating, while Shell dropped 1.3 per cent and TotalEnergies shed 1.4 per cent following a JPMorgan downgrade. Insurer Swiss Re slumped 6.5 per cent after its 2026 targets failed to impress analysts.
Swiss bank UBS surged 4.1 per cent late in the session after Reuters reported the country is set to soften certain capital rules. Basic resources stocks touched their highest level since May 2024, buoyed by copper’s remarkable run.
Australia
The local market faces a subdued open, with S&P/ASX 200 futures pointing to a 0.2 per cent fall, or around 0.3 per cent relative to fair value. This would extend the benchmark’s pullback from October’s record high, which now stands at 5.3 per cent.
All eyes turn to Tuesday’s RBA decision. While bond markets remain confident the central bank will hold the cash rate steady at 3.6 per cent, sentiment has shifted dramatically over the past month. Traders are now fully pricing in a rate hike next year, a stark reversal from just weeks ago when markets implied better than even odds of a cut. A string of data pointing to stronger economic growth and persistent inflationary pressures has spooked investors.
Among stocks to watch, National Storage could see action after reports Brookfield and GIC are nearing a binding offer. OpenAI and NextDC are reportedly planning a $4.6 billion Sydney data centre, while Ramsay Health features as a sale of Healthscope hospitals draws closer. DigiCo Infrastructure REIT appointed former AirTrunk executive Michael Juniper as chief executive.
Commodities and currencies
Copper continued its blistering rally, hitting a fresh record of US$11,705 per tonne before settling 1.5 per cent higher at US$11,620.50 on the London Metal Exchange. Citi analysts are forecasting prices could average US$13,000 in the second quarter as US stockpiling drains inventories elsewhere. The metal has gained more than 30 per cent this year.
Iron ore retreated as China’s steel sector showed seasonal fatigue, with port stockpiles jumping 2.4 per cent to 142.4 million tonnes.
WTI crude steadied around US$60 per barrel, while Brent settled at US$63.75. Gold eased 0.2 per cent to US$4,197.78 an ounce, and silver hit fresh records on strong ETF inflows.
The Australian dollar firmed 0.4 per cent to US66.38 cents, while the euro held steady at US$1.1641.
Economic Calendar
No Major economic announcements
This article was written by Calvin Curdie, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
