Wall Street eyes record, ASX set to rise

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A report on Tuesday morning showed the housing industry appears to be in stronger shape than expected. Homebuilders broke ground on many more new homes in November than expected, 200,000 more at a seasonally adjusted annualised rate.

Of course, Wall Street’s big moves also have critics saying the rally looks overdone and that stocks now look too expensive relative to how much profit companies are making. More cautious investors also say the number of rate cuts traders are penciling in for 2024 looks unlikely unless the U.S. economy falls into a recession.

Some Fed officials have been sounding more cautious about the prospect for rate cuts since Powell’s comments last week. On Friday, for example, the president of the Federal Reserve Bank of New York said it was “premature to be even thinking” about whether to cut rates in March.

Markets have nevertheless been ebullient, with the S&P 500 coming off its seventh straight winning week for its longest such streak in six years.

Showing how ravenous buyers have become, clients at Bank of America poured $US6.4 billion ($9.5 billion) more into US stocks last week than they withdrew. It’s the fourth-largest weekly inflow since it began tracking the data in 2008, strategist Jill Carey Hall said in a BofA Global Research report.

In the bond market, the yield on the 10-year Treasury slipped to 3.90 per cent from 3.94 per cent late Monday. It was above 5 per cent in October, at its highest level since 2007 and putting tremendous downward pressure on the stock market.

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Elsewhere on Wall Street, shares of Tylenol maker Kenvue jumped 5 per cent following a favourable ruling for it in federal court. The company wanted to exclude the opinions of experts in a multijurisdictional against it on whether in-utero exposure to acetaminophen, the pain reliever used in Tylenol and other generic drugs, could lead to autism or attention deficit disorder.

Judge Denise Cote of US District Court for the Southern District of New York agreed with Kenvue, ruling Monday that the testimony was inadmissible.

Alphabet added 0.6 per cent after its Google business settled allegations that it stifled competition against its Android app store, agreeing to $700 million and making several concessions.

Accenture was swinging between modest losses and gains after reporting stronger results than analysts expected for the latest quarter, but also giving a weaker-than-expected revenue forecast. It was recently down 0.1 per cent.

AP

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