Wednesday, December 7, 2022
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Markets rally on expectation that rate hikes may be coming to an end

US stocks closed higher Wednesday in a choppy session as meeting minutes from the Federal Reserve showed that the central bank is looking to hand out smaller rate hikes in the coming months as inflation cools off.

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The minutes of the US central bank’s November meeting showed a “substantial majority” of officials supported slowing down the pace of interest rate rises soon — even as some warned that monetary policy would need to be tightened more than expected next year.

Remember Markets will be closed tomorrow in the US for the Thanksgiving holiday and will close early on Friday.

The Dow Jones Industrial Average rose 95.96 points, or 0.28 per cent, to 34,194.06. The S&P 500 gained 0.60 per cent to close at 4,027.46 and the Nasdaq Composite increased 0.99 per cent to 11,285.32.

In company news Telsa rose 7 per cent on broker upgrades & in world cup related news – (Manchester United shares closed 21 per cent higher as the b oard announced it is beginning a process to explore strategic alternatives including new investment, a sale, or other transactions.

Credit Suisse shares fell as the bank forecasts more trouble ahead of a big capital-raising vote today, the beleaguered Swiss lender said in a trading update that it expects to lose $1.6 billion in the current quarter as its wealth management and investment banking divisions underperform.

And TSMC has announced plans to make advanced semiconductors at its new Arizona facility. . Nearly all of the world’s semiconductor manufacturing was outsourced to Taiwanese companies over the last two decades, and there is little chip-manufacturing capacity outside of Taiwan. TSMC accounts for over half the worlds chip production

Likewise US chip maker Intel started building two new semiconductor foundries in Arizona last year, at an estimated cost of $20 billion. In August 2022, Intel announced a new $30 billion funding model for the Arizona facility.

This is all about building supply-chain resiliency in the semiconductor industry. The supply-chain disruptions of the last several years exposed vulnerabilities and risks in critical industries. Fixing these problems is costly and complicated and requires US government support

Most sectors over night were higher though energy a notable laggard on the back of a 4.4 per cent fall in the oil price.

The real estate sector also underperformed as Home sales to investors plunged 30 per cent annually in the third quarter.The 30 per cent drop is the steepest since the subprime mortgage crisis, aside from a couple of months at the onset of the pandemic.

Best performing thematics included tesla related companies, new energy vehicle, EV charger & solid state battery companies


The SPI futures are pointing to a 0.1 per cent gain.


One Australian dollar at 8:10 AM has strengthened compared to the US dollar yesterday buying 67.35 US cents (Wed: 66.49 US cents)


Iron ore futures are pointing to a 1.6 per cent gain.

Gold added 0.6 per cent. Silver gained 2.4 per cent. Copper rose 0.8 per cent and oil fell 4.4 per cent.

Figures around the globe

Across the Atlantic, European markets closed higher. Paris added 0.3 per cent, Frankfurt closed flat and London’s FTSE closed 0.2 per cent higher.

In Asian markets, Tokyo’s Nikkei was closed, Hong Kong’s Hang Seng added 0.6 per cent and China’s Shanghai Composite closed 0.3 per cent higher.

Yesterday, the Australian sharemarket gained 0.7 per cent to close at 7232.


ALS (ASX:ALQ) is paying 20.3 cents unfranked
Aust Vintage (ASX:AVG) is paying 3.4 cents 60 per cent franked
Nufarm (ASX:NUF) is paying 6 cents unfranked
Terracom (ASX:TER) is paying 10 cents fully franked
Whitefield Industrials (ASX:WHF) is paying 10.25 cents fully franked

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.


The views, opinions or recommendations of the commentators in this presentation are solely those of the author and do not in any way reflect the views, opinions, recommendations, of Sequoia Financial Group Limited ABN 90 091 744 884 and its related bodies corporate (“SEQ”). SEQ makes no representation or warranty with respect to the accuracy, completeness or currency of the content. Any prices published are accurate subject to the time of filming and shouldn’t be relied upon to make a financial decision. Commentators may hold positions in stocks mentioned and companies may pay FNN to produce the content at times. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian Financial Services Licensee before making investment decisions. To the extent permitted by law, SEQ excludes all liability for any loss or damage arising in any way including by way of negligence.

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