Thanks to a massive $440BN surge overnight (the biggest day since Feb), the market cap of Magnificent 7 stocks ended the month down only 2.5% (though admittedly down 10% from the highs)...
Now the market's initial reaction to the FOMC statement was muted to say the least as Powell reiterated that “We have made no decisions about future meetings and that includes the September meeting."
But then Powell dropped the dovish hammer:
“I can imagine a scenario in which there would be everywhere from zero cuts to several cuts.”
...and stocks boomed big time, only to give it back after he stopped speaking...
The NASDAQ put on 451 (2.64%) pts!
Meanwhile back here in Australia, The ASX surged higher adding 139 (1.75%) pts taking the ASX 200 to a NEW RECORD HIGH!
Aussie bonds rallied (yields lower), the AUD fell all because the mkt focus only on the annual trimmed mean inflation print which came in at 3.9% down for 4% unlike the official CPI read which increased from 3.6% to 3.8%
Because the trimmed mean was lower (like 0.1% lower) the mkt decided that the RBA have taken rates hikes off the table, and bringing back the probability of cuts this side of Christmas. Rate-sensitive stocks soared, though the buying was broad-based based with almost 90% of the main board finishing higher.
Tell me - do you feel that inflation is under control?
The continuing tight rental market and low vacancy rates caused rental prices to go up 2% for the quarter, following a 2.1% rise in the March 2024 quarter.
Fruit and vegetable prices rose this quarter as apparently we had unfavourable growing conditions that drove higher prices for grapes, strawberries, blueberries, tomatoes and capsicums. This was the highest quarterly rise for Fruit and vegetables since 2016.
Anyway, welcome to the month of AUGUST!
Happy Thursday!!
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Andy is the founder of ANDIKA Pty Ltd, a licensed securities & derivatives dealer. He's the author of fiction and non-fiction books and has been a University lecturer on risk and investment.
