Market Wrap: Stocks, Bonds, Commodities
U.S. Stocks Rebound, Yen Surges on BoJ Policy Hints
In the stock market, it’s become Apple, Microsoft and Alphabet vs everyone else
KEY POINTS Does a relative shortage of stocks combined with somewhat mechanical sources of buying explain the Dow rising to 29,000? What’s truly scarce are big, reliable cash flows that investors believe will endure economic wobbles and constant technological disruption. This has created a vastly bifurcated market, and an unusually wide spread between the valuation of the most expensive stocks and the cheapest ones. In aggregate Apple-Microsoft-Alphabet trades at 26-times this year’s profits, with no debt and enormous capacity to invest, buy back stock or fund future dividends. The broad market is below 19-times earnings.
EURUSD At Resistance, S&P 500 View Dim on Google Antitrust Probe
The US Dollar dived, leaving EUR/USD under resistance. July Fed rate cut bets soared, but Alphabet Inc. sunk with tech share woes as the S&P 500 fell. Will AUD fall on an RBA rate cut？