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Investor optimism on dovish central bank comments

Markets

  • Local and global equity markets moved higher this week on dovish central bank comments, overcoming the potential impacts of a new conflict in the Middle East.

  • In local stock news, GQG Partners shares rose after reporting its funds under management grew to US$1.8 billion in the September quarter, to US$105.8 billion.

  • Origin Energy surged to a 5-year high following the competition watchdog authorising its $18.7 billion acquisition by Brookfield and EIG Partners.

  • CSL shares fell sharply on concerns that new weight loss drugs produced by other companies had shown early success in delaying the progression of kidney disease in diabetes patients, potentially threatening CSL Vifor’s established therapies for kidney disease and iron deficiencies.

  • IAG’s CEO reaffirmed the insurance companies 2023/24 guidance and told shareholders the financial year was off to a benign start from a natural disaster perspective.

  • Concerns the Israel/Palestine conflict could disrupt oil supplies pushed prices higher during the week.

Economic

  • NAB’s monthly business survey showed Australian conditions ticked down last month but remained above their historical levels. Business confidence remained unchanged.

  • Australian consumer sentiment ticked up last month but was still at very low levels.

  • US consumer prices for September rose by 0.4% in September and 3.7% from a year earlier, slightly higher than forecast. Core inflation (ex-food and energy) rose 0.3% in September, resulting in annual inflation easing from 4.3% to 4.1%, the lowest since September 2021.

  • The US Labor Department said US employers added 336,000 jobs in September, the highest since January. The unemployment rate was steady at 3.8% whilst the participation rate was unchanged. Average hourly earnings rose by 0.2% in September.

  • The US small business optimism index fell in September whilst US consumer inflation expectations for the year rose from 3.6% to 3.7%, coming in above expectations.

  • US producer prices climbed 0.5% in September from the month before, coming in above expectations. But core producer prices (ex-food and energy) rose by 0.2% from the prior month.

  • A member of the European central bank provided dovish comments saying inflation should still land at the bank’s target of around 2% by the end of 2025. Minutes from the bank’s September meeting showed division among policymakers when they raised rates to a record 4%.

  • Spending and travel over China’s holiday week came in below expectations, adding pressure on Beijing to add more stimulus.

Politics

  • Fresh conflict in the Middle East between Israel and Palestine has brought further risk to markets, with potential escalation points regarding the involvement of other countries.

  • The Australian government has pledged stable and reliable energy exports to Japan during bilateral trade meetings, amid concerns that stricter emissions targets will impose higher costs for fossil fuel projects.

Weekly market updates are written by Chris Lioutas. Chris is on the board of Peer Wealth X Futuro Investment Committee. View LinkedIn

Disclaimer: The material and contents provided in this article contains general information and does not take into account your personal objectives, financial situation or needs. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, please contact Peer Wealth on (02) 8014 7608.







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