Weekly market update - 31st of October 2023
Written and accurate as at: Oct 31, 2023 Current Stats & Facts
The global financial landscape last week was nothing short of tumultuous, marked by recession fears, inflation spikes, and geopolitical tensions.
A Rollercoaster for Big Tech and Global Indices
The week witnessed Big Tech companies in the U.S. posting their Q3 earnings, which left markets teetering on the edge. Despite beating Wall Street expectations, Alphabet and Meta hinted at reduced client spending, triggering a sell-off. This resulted in Alphabet losing a staggering $166 billion in market value in one day, the fifth-largest decline for a U.S. company.
In broader terms, global equity indices were universally down. The S&P 500 entered what's known as "correction territory," with a 10.3% decline since its late July highs, while the Nasdaq dropped by 1.9%. Simultaneously, the S&P ASX 200 in Australia saw a week-over-week decline of 1.1%, with notable dips in the Industrials and Info Tech sectors.
Surprising Resilience: The U.S. Economy
Despite investor anxiety, the U.S. economy posted positive surprises. Q3 GDP growth clocked in at 4.9%, significantly higher than market expectations. New home sales also surged by 12.3% in September, defying expectations and making it evident that higher mortgage rates have yet to discourage buyers.
Interest Rates and Inflation: What's on the Horizon?
Australia made headlines with its Q3 Consumer Price Index (CPI) reaching an annualized rate of 5.4%, exceeding market expectations. This has increased speculation about a possible rate hike on the upcoming Cup Day. Meanwhile, in the U.S., inflation remained a hot topic as Core PCE printed in line with expectations at 3.7% annually.
Major Market Movers
Lynas Rare Earths: Up by 13.2%, thanks to an extension to its Malaysian operating license.
Champion Iron: Increased by 10.5% due to Q2 results beating expectations.
Super Retail Group: Rose by 7.1% due to a trading update that exceeded expectations.
Healius Limited: Dropped by 16.2%, mainly due to uncertainties around a conditional bid by ACL.
Megaport: Declined by 17.4% following a Q1 update that didn't meet investor expectations.