Darren Sinden from educational provider Trade Uni discusses the latest market moves.
The US Federal Reserve has ridden to the rescue, though what exactly the market was being rescued from is unclear. Nonetheless, equity markets lapped up reduced borrowing costs and the prospect of more to come.
The S&P 500 finished the session at 5,713.64, up by 1.7%, and its year-to-date gains now stand at 19.8%. The Nasdaq 100 rallied by 2.6% to close at 1,839.80, while the Dow Jones added 1.3% to end the day at 42,025. The Euro Stoxx 50 added 2.2%, only eclipsed by the CAC 40 which rallied by 2.3% on the day.
Despite those gains, the CAC has barely made any ground during 2024, largely due to the political turmoil that engulfed France over the summer. Looking at flows on the session in the US, buying or advancing volume beat selling by a ratio of almost 3:1 on the NYSE and by more than 3.50:1 on the Nasdaq, and well over 70% of issues on both exchanges were up on the day.
There were plenty of new highs on show too, though most of these were at the ‘short end’. In terms of sector performance, the clear winners were information technology and consumer discretionary, which rallied by 3.08% and 2.2% respectively. However, several sectors were down on the day; consumer staples fell by 0.58%, for example. The acid test of a rally is often the volume accompanying it, and while many mega-cap stocks exceeded their 20-day average volume, it wasn't always by a substantial margin.
Bulls will take heart from the fact that Apple traded 42% more than its 20-day average turnover, though the biggest percentage increase in volume among the stocks with the largest market cap was found in Visa and Mastercard, which finished down on the day. The biggest gainer on the day in the S&P 500 was Darden Restaurants, which rose 8.25% on upbeat earnings and raised guidance. Tesla was up by 7.36%, but the EV maker still nurses a 1.84% loss year-to-date.
In Europe, Adidas jumped by 3.1% but that wasn't good enough to take the top spot in the Euro Stoxx 50. Instead, Adyen was once again the biggest gainer, up by 5.6% yesterday, and by 7.1% over the last five trading days. Engineering group Kone Oyj fell by 2.6% and property investor Vonovia fell by 2.4%.
The US real-estate sector also finished down on the day yesterday, suggesting that it may have been a case of ’buy the rumour and sell the fact’ as far as real-estate investment trusts (REITs) are concerned. Gold and silver are off to a flying start this morning, up by 0.66% and 1.3% in Europe, while copper has added 0.73%. CFDs on US equity indices are called higher once more, taking the Nasdaq 100 back through 20,000 and the S&P 500 to 5,762. However, European equity indices are opening lower. The British pound continues to gain against the dollar. The dollar index is weaker again but still above the key 100 level. US 10-year bond yields are marginally higher on the day.
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