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31 May Markets at a glance

ASX bucks the broader trend to snap a three-day slide, global markets cautious ahead of US PCE data and Guzman y Gomez sets its sights on an IPO.

The S&P/ASX200 has recovered from yesterday’s sell-off, trading higher and on track to snap a three-day slide.

Commodities and financials are leading the charge, as investor woes over a “higher for longer” interest rate environment were tempered on the heels of a downward revision to first quarter US GDP. 

Sector specific, gold stocks are higher, tracking bullion prices, energy also in the black after a seven-session losing streak.

Overall global equities remain on the back foot as traders worry about rising rates and the reticence of the US Federal Reserve to cut them. All eyes remain on tonight’s PCE indicator, the Fed’s preferred measure of inflation, for any clues on the path of policy.

Markets are currently pricing in a 55% chance of rate cuts to begin in September, up from 51% the day before, according to the CME Group's FedWatch Tool.

Locally on the interest rate outlook, markets are back to pricing in a 12% chance of a hike from the Reserve Bank of Australia (RBA), down from 27% yesterday.

On currency markets, the greenback is tracking sideways ahead of that key PCE data drop tonight, though has regained some lost ground after a downward revision to U.S. GDP for the first quarter suggests there may be room for rate cuts this year.

The Japanese yen is holding around 156.77, after touching a four-week low earlier in the week and has brushed off a surprise rise in CPI.

The Australian dollar (AUD) is taking a breather to trade flat after a week of relatively choppy trade. This after China’s official purchasing mangers’ index (PMI) surprised to the downside and slipped into contractionary territory at 49.5 in May, dampening investors hopes the Tiger economy was picking up steam.

The Euro is flat, while sterling is unchanged.

Stock specific, the broader healthcare sector is getting a boost thanks to Telix Pharmaceuticals (TLX).  Shares have jumped to touch a record high after the company unveiled positive data from a clinical trial.

Australian listed shares of Select Harvest (SHV) are also tracking higher in this Friday session, as the almond product posts a narrowing half year loss on a year ago of AU$2.1 million (compared with the AU$96.2 million on PCP).

Rio Tinto (RIO) has entered into an agreement to buy Sumitomo Chemical’s 20.64% stake in New Zealand Aluminium Smelters (NZAS) to get control of the country’s only aluminium smelter, though the value of the deal has not been revealed. 

And in IPO land, Australian fast food chain Guzman y Gomez will aim to raise AU$242.5 million in a June initial public offering.

In a company statement GYG says it will sell 11.1 million shares at AU$22 each which will value the Mexican food chain around AU$2.2 billion.

 

All prices and analysis at 31 May 2024.  The content is distributed by WealthHub Securities Limited (WSL) (ABN 83 089 718 249)(AFSL No. 230704). WSL is a Market Participant under the ASIC Market Integrity Rules and a wholly owned subsidiary of National Australia Bank Limited (ABN 12 004 044 937)(AFSL No. 230686) (NAB). NAB doesn’t guarantee its subsidiaries’ obligations or performance, or the products or services its subsidiaries offer.  This material is intended to provide general advice only. It has been prepared without having regard to or taking into account any particular investor’s objectives, financial situation and/or needs. All investors should therefore consider the appropriateness of the advice, in light of their own objectives, financial situation and/or needs, before acting on the advice.  Past performance is not a reliable indicator of future performance.  Any comments, suggestions or views presented do not reflect the views of WSL and/or NAB.  Subject to any terms implied by law and which cannot be excluded, neither WSL nor NAB shall be liable for any errors, omissions, defects or misrepresentations in the information or general advice including any third party sourced data (including by reasons of negligence, negligent misstatement or otherwise) or for any loss or damage (whether direct or indirect) suffered by persons who use or rely on the general advice or information. If any law prohibits the exclusion of such liability, WSL and NAB limit its liability to the re-supply of the information, provided that such limitation is permitted by law and is fair and reasonable. For more information, please click here.


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