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ASX 200 surpassed 8000 - Is it a new start for AU market?

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Moomoo AU wrote a column · Jul 18, 2024 11:06
The $S&P/ASX 200 (.XJO.AU)$ recent surge past 8000 prompts a pivotal question: has the Australian market entered a new phase? With the RBA's August interest rate decision looming and June's high CPI data hinting at a policy shift, investors are on edge.
Globally, receding US inflation rates and expectations of a Federal Reserve rate cut have buoyed market optimism. This, coupled with the $S&P 500 Index (.SPX.US)$ record high, has resonated in Australia, propelling the ASX 200 upward.
In this column, we'll dissect the factors that impact the ASX 200 milestone. Keep reading:
I. ASX 200 hits record 8000: What's driving the surge? 🌏
- US inflation easing:  What does it mean for ASX shares?
A softer US consumer price index and signs of a cooling labor market have added fuel to the fire for those betting on a Fed rate cut. If the Federal Reserve proceeds with lowering rates, it might influence the Reserve Bank of Australia to adopt a similar stance. This global shift in monetary policy can create ripples across not only financial and mining sectors but also impact the dynamics of global trade and investment.
As such, this inflation report is exciting for ASX investors, which might be at least partly why the Australian stock market is reaching new record highs.
Rate Cuts and Borrowing Costs: Potential rate cuts lower borrowing costs, which can benefit small and medium-sized companies more than large ones. These companies often rely more heavily on borrowing to fund operations and growth. Lower interest rates can significantly reduce their expenses, making it easier for them to turn a profit.
- How the Trump shooting could impact stock markets?
It was also buoyed by investor wagers that Donald Trump would win the US presidential election following Saturday’s assassination attempt.
For markets, it means haven trades but more skewed towards non-traditional havens. Investors should also prepare for more stock market volatility, it is likely to mark the 'grand opening' of an elevated period of volatility for risk assets.
Trump trades are also poised to move on the high conviction list for investors. Traditional energy companies could benefit as part of the so-called Trump trade while renewable energy companies could see their stock market prices come under pressure.

Click to view Trump-win beneficial stocks>>
ASX 200 surpassed 8000 - Is it a new start for AU market?
- ASX 200 re-writes history thanks to Miners and Banks
ASX investors mostly have the big four bank stocks to thank for this latest high for the Australian share market. All four of the big banks have surged in recent months, and hit new 52-week highs.
But it has been $CommBank (CBA.AU)$that have shone the brightest. Over the past week alone, CBA has hit a series of new record highs, topping out at $133.30 a share.
Meanwhile, miners saw a 0.6% uptick, banking on the optimism of further stimulus announcements from China. China, Australia’s largest trading partner, is expected to announce new economic stimulus measures soon, providing more wind in the sails for Australian miners and potentially buoying broader markets. And sectors such as healthcare and energy are also seeing gains—up 1.2% and 0.6% respectively—indicating broad-based optimism in the market.
@JC7577: This chart from CBA is arguably one of the most important around for Australia currently.
Annual jobs growth outside non-market employment ....... is basically dead. Yet jobs growth in aggregate is higher than pre-Covid.
ASX 200 surpassed 8000 - Is it a new start for AU market?
@mrminivee: The ASX 200 opens flat after yesterday's record breaking day. Small caps were strong again, with the Russell 2000 up 7.7% in the past 4 sessions. 💁‍♀️ 'Trump Trade' – which includes 📈 US dollar, 📉 yields – gathers momentum after shooting, while crypto soars.
@OB1KENOB: FY24, it's official - $BHP Group Ltd (BHP.AU)$slayed the game with operational brilliance! 🚀 They not only met but exceeded all production goals, leaving everyone in awe! 😲......It's like BHP's got its own superhero cape on, soaring through challenges and delivering results that are out of this world! 🌌
II. What can you learn in moomoo? 📖
If you are new to investment, feeling confused about the terms like 'inflation', 'interest rate' and knowing little about the ASX 200, then we highly recommend these dedicated content for you:
Feel free to share them with your family and friends!
III. Share & Get 🎁
❓ What else do you want to know about investment in Australia? Tell us in comments and we'll pick it up!
❓ Do you have any strategy modification based on the market change? Share it in comments, and we'll choose 10 COMMENTs to share 2000 POINTs!
(The rewards will be distributed next Monday and the winners can check the points in [moomoo - Me - Redeem Points].)
ASX 200 surpassed 8000 - Is it a new start for AU market?
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more
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