US equities: Recovery continues after post-election selloff – Rabobank
Rabobank's RaboResearch Global Economics & Markets reports that the S&P 500 has rebounded about 3% to pre-November 4 levels after a sharp 4.4% post-Midterm election drop, while the Nasdaq gained 5% over two sessions, supported by an 11% rise in the Philadelphia Semiconductor Index.
The Rabobank's RaboResearch Global Economics & Markets report reveals that the S&P 500 has rebounded approximately 3% to pre-November 4 levels following a sharp 4.4% post-Midterm election drop. Meanwhile, the Nasdaq experienced a 5% gain over two sessions, bolstered by an 11% rise in the Philadelphia Semiconductor Index. However, Rabobank warns that structural risks persist for the US AI infrastructure buildout.
After a disastrous 4.4% decline the previous day, the S&P 500 has shown signs of recovery, returning to levels seen before November 4. Despite Jensen Huang's unfortunate headlines, the Nasdaq has also rebounded strongly, with the Philadelphia Semiconductor Index surging more than 11%. Nevertheless, US AI infrastructure risks remain.
This situation also keeps the US behind in its reindustrialization efforts, widening the manufacturing gap between the US and China. Yet, equities performed well yesterday, and the market seems willing to address these issues later. The Australian Dollar (AUD) failed to capitalize on the previous day's recovery, remaining defensive near the 0.6900 level due to China's narrowed trade surplus.
A rise in December Fed rate hike bets has caused the US Dollar to pause its decline, impacting AUD/USD. On Friday, Payrolls data revealed a significant gain of 165,000 new jobs, surpassing the 65,000 forecast. Unemployment fell from 4.2% to 4.1%, while average hourly earnings increased by only 0.4% to $32.75. The upcoming US CPI and PPI reports will provide crucial insights into the economy.
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