Markets Overview

  • ASX SPI 200 futures down 0.2% to 8,888.00
  • S&P 500 up 0.2% to 6,856.98
  • Dow Average down 0.5% to 47,345.19
  • Aussie little changed at 0.6540 per US$
  • US 10-year yield rose 2.7bps to 4.1046%
  • Australia 3-year bond yield rose 3.8 bps to 3.64%
  • Australia 10-year bond yield rose 4 bps to 4.34%
  • Gold spot little changed at $4,004.45
  • Brent futures little changed at $64.83/bbl

Economic Events

  • 14:30: (AU) Nov. RBA Cash Rate Target, est. 3.60%, prior 3.60%
  • 14:30: (AU) RBA-Statement on Monetary Policy

RBA is expected to keep interest rates unchanged at 3.6% as inflation proves sticky. Bloomberg Economics sees the central bank resuming rate cuts in February. Westpac CEO Anthony Miller struck an upbeat tone on the state of Australian consumers and businesses, in comments that underscore why the RBA is likely to remain cautious about lowering rates further.

The start of what’s known as the best month of the year for stocks saw tech rallying as Amazon.com Inc.’s $38 billion deal with OpenAI added fuel to the artificial-intelligence trade. Bond yields rose. Crypto sank.

A renewed advance in megacaps drove a gauge of the “Magnificent Seven” up 1.2%. The ChatGPT maker will pay Amazon Web Services for access to hundreds of thousands of Nvidia Corp. graphics processing units as part of a seven-year deal. Shares of the online retail giant jumped 4%. Despite the AI optimism, over 300 firms in the S&P 500 actually retreated.

Monday’s deal saw another industry giant join the ranks of those building or retrofitting data centers to back OpenAI. The animal spirits surrounding the revolutionary technology confronted calls for broader-market consolidation after a relentless surge since April’s meltdown.

Traders also kept an eye on the few economic reports slated for this week. US factory activity shrank in October for an eighth straight month while inflationary pressures continued to ease.

Federal Reserve Bank of Chicago President Austan Goolsbee warned he’s more concerned about inflation than jobs. His San Francisco counterpart Mary Daly said officials should “keep an open mind” about the possibility a December cut. Fed Governor Stephen Miran noted policy remains restrictive.

“Concerns over high valuations persist, and the Federal Reserve’s policy outlook appears murkier,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management. “Despite the strong gains in equity markets this year, we continue to believe that this bull market has room to run.”

The S&P 500 closed around 6,850. Its equal-weighted version – which gives Dollar Tree Inc. as much clout as Apple Inc. – slid. In late hours, Palantir Technologies Inc. gave a bullish outlook, citing “accelerating and otherworldly” growth for its AI and data analytics products.

The yield on 10-year Treasuries climbed two basis points to 4.10%. Bitcoin sank about 3%. The dollar wavered.