ASX set for strong start ahead of inflation report
Apple rose 0.7 percent amid predictions that it will reclaim the title of the world’s largest smartphone maker from Samsung for the first time in more than a decade, fueled by the successful launch of iPhone 17 models and a rush by consumers to upgrade their devices, according to Counterpoint Research. The company also benefited from cooling US-China trade tensions and a depreciating US dollar that boosted buying in emerging markets, Counterpoint Research said.
Mixed profit reports also caused huge swings for many retailers.
Abercrombie & Fitch gained 35.1 percent after the apparel retailer reported stronger profits than analysts expected in its latest quarter. It also raised the lower end of its forecast revenue and profit range for the full year. Kohl’s rose 34.9 percent after reporting a profit in its latest quarter, when analysts expected a loss.
Fed chairman Jerome ‘Powell doesn’t need to be the Grinch who steals Christmas.’
Economist Brian Jacobsen
Hopes that the Fed will cut its key interest rate at its next meeting in December helped keep the market generally calm. The Fed has already cut interest rates twice this year in hopes of supporting a slowing economy, and low interest rates can cover up many sins in financial markets, including prices getting too high.
A series of data on the US economy has investors betting that there is an almost 83 percent chance that the Fed will cut interest rates in December, according to data from CME Group. This is roughly the same as the day before and a sharp increase from the coin toss odds seen a week ago.
Shoppers bought less from U.S. retailers in September than economists expected, a report said. Another said confidence among U.S. consumers has deteriorated more than economists expected, a potential signal that the economy could use lower interest rates.
Loading
Meanwhile, a third report said wholesale inflation was slightly worse than economists expected in September, but the closely watched underlying trend was slightly better. This is important because low interest rates can make inflation worse, and still-high inflation could be the main deterrent that could push the Fed to cut further interest rates.
After putting all the data together, many economists suggested that the Fed and its chairman, Jerome Powell, may turn to a rate cut on December 10.
“A pause in rate cuts would likely hurt confidence more than a cut would,” according to Brian Jacobsen, chief economist at Annex Wealth Management. He also said, “Powell doesn’t need to be the Grinch who steals Christmas.”
In the bond market, the yield on the 10-year Treasury note fell to 4 percent from 4.04 percent late Monday.
Easier interest rates could especially help stocks of smaller companies, as many need to borrow money to grow. The Russell 2000 index, which includes the smallest US stocks, led the market by rising 1.9 percent.
In other international markets, indices rose modestly across much of Europe and Asia.
AP via Bloomberg
