Global Factors influencing ASX stocks on 14 November 2023

On 14 November 2023, at AEDT 11:36 AM, the benchmark index S&P/ASX 200 is trading higher today, gaining 52.90 points or 0.76%, and is currently trading at 7,001.70 levels. Out of 11 sectors, 9 are trading higher along with the S&P/ASX 200. The Energy and Materials sectors were the top 2 gaining sectors, up by 2.41% and 1.56% in their index values.

Also read:  Mid-Market: S&P/ASX 200 Trading Higher By 0.68%; Lifted by Energy and Materials

On that note, let us look at a few global reasons impacting the stock market today:

1. Some of the key U.S. indices ended mixed in their previous session. NASDAQ Composite, NASDAQ-100, S&P 500 ended lower by 0.22%, 0.30%, 0.08%, while Dow jones ended higher by 0.16% respectively.

2. On Monday, the Dow experienced a moderate increase, driven by the performance of energy and healthcare stocks. However, the upward trend was restrained as traders exercised caution ahead of the upcoming release of inflation data on Tuesday. The rise in energy stocks was linked to a recovery in oil prices, rebounding from significant losses the previous week amid ongoing concerns about a global demand slowdown, notably from China, the leading global importer of crude oil.

In addition to the upswing in oil prices, the broader energy sector received a boost from a 1% rise in Exxon Mobil Corp. This increase followed the energy giant's announcement of plans to initiate lithium production in 2027.

3. The Federal Reserve's prolonged higher-rate approach is poised to be succeeded by a series of rate cuts starting in June next year, surpassing market expectations. The anticipation is for a soft landing as the Fed works toward curbing inflation, with four 25 basis point cuts expected in 2024, reducing rates from 5.375% to 4.375%. This will be followed by eight cuts in 2025, aiming to bring the benchmark rate to 2.375% by the end of that year. This projection surpasses the current market expectations, which foresee the Fed funds rate ending next year in a range of 4.50% to 4.75%, or 4.625% at the midpoint, indicating three rate cuts for the year. It also exceeds the Fed's own projections, which suggest two rate cuts in 2024.

4. OPEC, following its typical pattern, has attributed the oil market crash to external factors, deflecting responsibility. The organization has bolstered its optimism about oil demand, raising its 2023 world oil demand growth forecast to 2.46 million barrels per day, an increase of 20,000 from the previous estimate. For 2024, OPEC maintains its projection of demand rising by 2.25 million bpd, unchanged from the previous month.

5. The Hang Seng and FTSE 100 is up by 1.30% and 0.89%.

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