Market Update – 23 October 2024

Australian shares started the week off high, buoyed by a positive performance in US markets where major averages marked their sixth consecutive week of gains. ASX futures were up 0.52%, or 44 points, as of 8:00am, indicating a strong start to the trading week.

In the US, Netflix shares surged 10.9% after the streaming giant reported its most profitable quarter ever. This impressive performance highlights Netflix’s ability to navigate a competitive market and continue to attract subscribers. However, not all blue-chip stocks fared as well; American Express saw its stock drop 3.1% following a revenue miss, reflecting challenges in the financial sector.

Earnings season is in full swing, with a small portion of the S&P 500 having reported third-quarter results. Approximately 80% of these companies have exceeded analysts’ expectations, consistent with trends from previous quarters. Notably, strong earnings from major banks have bolstered hopes for a soft economic landing, suggesting resilience in the financial sector despite broader economic uncertainties.

Technology stocks were the driving force behind the gains in the S&P 500 and Nasdaq Composite, which closed up 0.4% and 0.6%, respectively. The Dow Jones Industrial Average also edged higher, rising 0.1% to a new record. This upward momentum in tech stocks underscores the sector’s critical role in the current market landscape, driven by innovation and robust earnings reports.

In commodity markets, Brent crude oil fell 1.9% to US$73.06 a barrel, reflecting ongoing volatility and concerns over global demand. Meanwhile, gold prices increased by 1.1% to US$2,721.46, as investors sought safe-haven assets amid market fluctuations. The Australian dollar was trading at 67.07 US cents, showing relative stability in the currency markets.

Investors will be closely watching the Australian market’s response to these developments as trading begins. The positive sentiment from the US could provide a boost to local stocks, particularly in sectors aligned with global trends such as technology and finance. Additionally, the performance of commodities will be a key focus, given Australia’s significant resource exports.

As the trading week unfolds, market participants will be keenly attuned to further earnings reports and economic data, which will provide more insights into the health of the global economy and potential impacts on the Australian market.