Market Update - 24th February 2024
Written by Brad Laird & William Cooper
Exacerbated by market leader Woolworths’ record-breaking profits and the stepping down of Brad Banducci in what can simply be described as the most unsuitable of timing, the domestic market has expressed its deep dissatisfaction with the consumer staples market, watching it slide to its lowest price of the year.
Despite this, the ASX200 is relatively flat, with the banks showing continual and unwavering growth reaching a 52-week high this week. However, on the back end of what wall street analysts are describing as “insane” profits, American AI chip producer Nvidia has promoted increased enthusiasm of the domestic technology market, which is up 3.97% for the week and 12.88% for the month.
Unless you were living under a rock, the news Taylor Swift was in town should be no surprise. What has been described as the “Swift effect”, local restaurants, bars, and all kinds of tourism operators within striking range of the event have seen demand increase no less than 50 percent. The market has been described as challenging for a lot of these businesses, especially when cost-of-living pressures have never been higher, but it certainly hasn’t stopped the onslaught of Swifties reinvigorating the local economy.
Over in the US, the S&P500 experienced a slight pullback after a five-week winning streak, but still remains significantly higher than its recent lows. This pullback was attributed to several factors, including:
Inflation concerns: Rising inflation data and higher bond yields dampened investor optimism and led to expectations of continued interest rate hikes.
Slower consumer spending: Retail sales data showed that American consumers cut back on spending after the holiday season, raising concerns about economic growth.
Global economic slowdown: Initial estimates indicate that both Japan and the UK entered recessions in late 2023.
Despite these headwinds, there were also some positive signs, such as improving earnings expectations and rising consumer sentiment. Additionally, small-cap stocks outperformed large-cap stocks for the second week in a row.
