AU Morning Wrap: ASX rallies to 7-month high; Domino's to raise $165m

Wall Street Summary
Fed Chair Powell ignited a frantic afternoon rally in US stocks with news the market has waited months to hear: this year's aggressive rates cycle may finally slow down.

"It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down," Powell said in a speech at the Brookings Institution think tank in Washington. "The time for moderating the pace of rate increases may come as soon as the December meeting."

Wall Street slumped into a bear market earlier this year as the Fed hiked benchmark rates from near zero to 3.75-4 per cent. Last month's meeting marked a sixth consecutive rate hike and a fourth straight increase of 75 basis points.

Wall Street greeted last night's speech as a welcome turning point in this rates cycle. Market pricing on a 50 bp rate hike this month climbed to 75 per cent.

Megaport led the gainers, up 6.7 per cent alongside Block, Remelius Resources, Seek and Xero. Woodside fell 1.9 per cent.

The capital raising comprises a fully underwritten share placement to institutional investors to raise $150 million and a non-underwritten share purchase plan to be offered to eligible shareholders to raise an additional $15 million.

Domino's says the funds will be used to "fund the option exercise price for the acquisition of all the shares held by DPG in the German joint venture and any surplus will be applied towards debt retirement".

Cochlear has issued a statement saying it does not believe the proposed acquisition of Oticon Medical will reduce competition.

The company said it will continue to work with the ACCC to address the matters raised as part of this public consultation process.

China's November steel industry PMI fell 4.2 percentage points to 40.1%.

New order subindex fell 8.9 percentage points to 34.5%.

• Oil prices rallied on China's reopening optimism and Powell's dovish comments. Prices are up 9.6% since Tuesday's low.

"Energy traders are looking at the next week and see two potential bullish catalysts for oil prices; an OPEC+ decision that could easily justify lower output targets given China's demand outlook and a Russian crude price cap that needs to be put in place; otherwise, a ban on Russian imports takes effect on December 5th." - Oanda senior market analyst, Ed Moya

• Gold also rallied, locking in its best month since May 2021.

Powell's dovish remarks sent bond yields and the US dollar meaningfully lower, which typically move in the opposite direction as the yellow metal.