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American markets soar as new rate cut looms

NYSE

Buoyed by an expectation that the United States’ Federal Reserve will lower the official US cash rate, the S&P 500 has seen near record highs this week, which could materially impact the Australian market.

While investors await quarterly earnings from blue chip companies, including Facebook, Alphabet and Amazon, a reactive market has still seen growth of 0.28 per cent, according to Morningstar.

Overall, the Dow Jones moved 18 points higher, having closed at 27,172.

NASDAQ also grew – by 0.71 per cent to 8,204.

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Responding to the news coming out of the United States, Morningstar also reported on the worldwide impacts of an anticipated US cash rate change.

The FTSE 100 index grew moderately by 6 basis points (or 0.08 per cent) to 7,515.

In Hong Kong, the Hang Seng Index did close 1.4 per cent lower at 28,371.26, while the China Enterprises Index fell 1.3 per cent to land at 10,770.31 points.

Japan’s Nikkei 225 also closed weaker, falling by 0.23 per cent to 21,417.

China’s major stock indexes closed lower on Monday, as enthusiasm for the country’s new Nasdaq-style STAR Market drew investor attention away from the main boards, it was explained.

The blue chip CSI 300 index fell 0.7 per cent to 3,781.68, while the Shanghai Composite Index closed down 1.3 per cent at 2,886.97.

Domestic outlook

As a result of changes to the international outlook, Morningstar noted that the Australian market is expected to edge lower, with traders apparently cautious on a number of fronts.

Commenting on the domestic impact, X-chainge co-founder and director Nick Twidale said he believes foreign uncertainty is having an effect on Australia’s markets.

“Markets were feeling jittery with Iran seizing a British-flagged oil tanker and protests in Hong Kong turning violent over the weekend; a leadership vote on a new prime minister in the UK set for Tuesday that could determine whether Brexit will be hard or soft; and a busy week beginning starting in the US in which numerous giant corporations including Amazon and Google parent Alphabet Inc will report earnings,” Mr Twidale said.

ASX figures

Morningstar noted the benchmark S&P/ASX 200 index as being down 9.1 points, or 0.1 per cent, to 6,691.2 points as of 4:30pm AEST on 22 July.

The All Ordinaries was also down five points, or 0.1 per cent, to 6,781.2.

In contrast, the NZX 50 added 71.54 points (0.67 per cent), which saw it close on 22 July at 10,824.69.

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American markets soar as new rate cut looms
NYSE
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Cameron Micallef

Cameron Micallef is a journalist at Nest Egg, writing primarily about personal wealth and economic markets. 

Prior to this, Cameron worked for Australian Associated Press. He graduated from the University of Wollongong with a double degree in communications and commerce.

You can contact him on: This email address is being protected from spambots. You need JavaScript enabled to view it.

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