US stocks on track for biggest monthly gain in 2023

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Note: Figures recorded at 7:45am AEDT. The closing figures and video recording will be available at 9:00am AEDT.

On Wednesday, US stocks are trading higher, keeping the major averages on course for their most significant monthly growth in 2023.

The Dow Jones Industrial Average was up about 105 points, or 0.3%. The S&P 500 ticked up by 0.2%, and the Nasdaq Composite rose by 0.1%.

General Motors shares popped about 9.3% after the company announced a $10 billion buyback and raised its dividend, and NetApp soared 15% on an earnings beat. Phillips 66′s stock jumped 4.3% after Elliott Investment Management took a $1 billion stake in the energy company.

The yield on the 10-year Treasury note fell below 4.3% for the first time since September, lending support to stock valuations.

However, US bonds are on track for their best monthly performance in almost 40 years, with the Bloomberg US Aggregate bond index rising 4.3% in November, driven by expectations of Federal Reserve rate cuts next year. This could prevent a three-year losing streak, an unprecedented event in its 47-year history.

The US dollar hit a three-month low as confidence in the US Federal Reserve's potential interest rate cuts by mid-2024 grew, with Treasury yields falling. This decline was fueled by remarks from Fed policymaker Christopher Waller, suggesting that rates might not rise further and could be cut if inflation slows.

Data released Wednesday showed gross domestic product in the third quarter grew at a stronger-than-forecast annual rate of 5.2%. The boost came primarily from revisions to government spending and investments in nonresidential structures.

Traders have been optimistic that the Fed’s rate-hiking cycle is over, with fed funds futures pricing reflecting a chance the central bank could cut rates as early as next spring.

However, Richmond Fed President Thomas Barkin said Wednesday that policymakers could keep rate increases on the table if inflation doesn’t continue to slow.

The major averages are on track for strong monthly gains. The S&P 500 and Dow are up 8.8% and 7.3%, respectively, in November. The Nasdaq has climbed 11.3% over the same period.

The influential Organization of Petroleum Exporting Countries and its allies, collectively known as OPEC+, convene to decide next production policy steps on Thursday, in a postponed virtual meeting overshadowed by conflict in the Middle East, internal disgruntlement and the imminent expiry of a key Saudi supply cut.

All eyes have turned on whether the OPEC subset of the group — steered by heavyweight Saudi Arabia — will have mended its differences, after sources told CNBC that Angola and Nigeria objected to lower baselines for next year. Baselines, levels off which cuts and quotas are decided, have been a bone of contention within OPEC+, stalling talks amid UAE pushback in the summer of 2021.

Figures around the globe

European markets closed mixed. London’s FTSE fell 0.43 per cent, Frankfurt gained 1.09 per cent, and Paris closed 0.24 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei fell 0.26 per cent, Hong Kong’s Hang Seng lost 2.08 per cent while China’s Shanghai Composite closed 0.56 per cent lower.

The Australian share market closed 0.29 per cent higher at 7035.35.

Aristocrat Leisure (ASX:ALL) is paying 34 cents fully franked
Metrics Income (ASX:MOT) is paying 2.06 cents unfranked
Metrics Master (ASX:MXT) is paying 1.5 cents unfranked
Pengana Int Equ Ltd (ASX:PIA) is paying 1.35 cents fully franked
Technology One (ASX:TNE) is paying 14.9 cents 60 per cent franked

Dividends payable
Bisalloy Steel Group Ltd (ASX:BIS)
Rand Mining Ltd (ASX:RND)
Copper Strike Ltd (ASX:CSE)
Acrow Ltd (ASX:ACF)
Kelly Partners Group Holdings Ltd (ASX:KPG)
Janus Henderson Group PLC (ASX:JHG)
Tribune Resources Ltd (ASX:TBR)
BlackWall Ltd (ASX:BWF)
US Student Housing REIT (ASX:USQ)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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