Retailers were mixed after a report showed consumer confidence had risen 2.9 percentage points last week to its highest level in two months, boosted by expectations for the Black Friday sales. Inflation expectations increased at the same time, lifting to their highest rate since December 2023 ahead of Wednesday’s release of Australia’s inflation figures for October, the ANZ-Roy Morgan Australian Consumer Confidence report said.
Wesfarmers, which owns the Officeworks, Bunnings and Kmart chains, dropped 0.7 per cent; electronics retailer JB Hi-Fi rose 0.4 per cent; and furniture seller Harvey Norman gained 0.8 per cent. Consumer staples lost ground. Woolworths was down 0.5 per cent and Coles was down 1.2 per cent.
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The ASX’s major technology stocks were mostly higher, with the exception of WiseTech, which fell 1.5 per cent. Accounting software group Xero rose 0.5 per cent, family-member tracking app Life 360 gained 6.6 per cent and AI data centre operator Next DC edged up 0.2 per cent.
In healthcare, Ramsay Health Care shares jumped 12.7 per cent after the hospital operator said its earnings before interest and tax had risen 5.8 per cent in its first financial quarter, and it confirmed forecasts for higher profits for the full year.
In New York, futures for the US market were slightly lower in early afternoon AEDT, suggesting after the gains of the past two sessions a more hesitant start to trading when Wall Street opens again. US shares had their strongest session since the northern hemisphere summer overnight amid rising hopes that the Federal Reserve will cut its main interest rate again at its December meeting, which could boost the world’s largest economy and investment prices.
The market also benefited from strength for stocks caught up in the artificial intelligence frenzy. Alphabet, which has been getting praise for its newest Gemini AI model, rallied 6.3 per cent and was one of the strongest forces lifting the S&P 500. Nvidia rose 2.1 per cent.
The tech giants boosted the S&P 500, which finished 1.5 per cent higher, while the Dow Jones Industrial Average rose 0.4 per cent and the tech-heavy Nasdaq jumped 2.7 per cent.
Stocks have been swinging sharply, not just day to day but also hour to hour, in recent weeks as worries weigh over what the US central bank will do with interest rates and whether too much money is pouring into AI and creating a bubble. All the uncertainty is creating the biggest test for investors since an April sell-off, when US President Donald Trump shocked the world with his “Liberation Day” tariffs.
Still, despite all the recent fear, the S&P 500 remains within 2.7 per cent of its record set last month.
“It’s reasonable to expect that stocks will experience periods of pressure from time to time, which, historically, is quite healthy for longer term strength,” Ameriprise chief market strategist Anthony Saglimbene wrote in a note to investors.
Several more tests lie ahead for the market this week, though none looms quite as large as last week’s profit report from Nvidia or the delayed jobs report from the US government for September.
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One of the biggest tests will come on Tuesday, when the US government will deliver data showing how bad inflation was at the wholesale level in September.
Economists expect it to show a 2.6 per cent rise from a year earlier, the same inflation rate as August. A higher than expected reading could deter the Fed from cutting its main interest rate in December for a third time this year because lower rates can worsen inflation. Some Fed officials have argued against a December cut in part because inflation has stubbornly remained above their 2 per cent target.
Traders are nevertheless betting on a 79 per cent probability that the Fed will cut rates next month, up from 71 per cent on Friday and from less than a coin flip’s chance a week ago, according to CME Group. Federal Reserve governor Christopher Waller fuelled that optimism on Monday after indicating support for a rate cut next month. New York Fed president John Williams had a similar impact on the market on Friday after he said a near-term rate cut remained a possibility.
Wall Street will be closed on Thursday for the Thanksgiving holiday. A day later, it’s on to the rush of Black Friday and Cyber Monday.
with AP, Bloomberg, AAP
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