Global Factors influencing ASX stocks on 16 November 2023

On 16 November 2023, at AEDT 12:30 PM, the benchmark index S&P/ASX 200 is trading lower today, declining 16.80 points or 0.24%, and is currently trading at 7,089.10 levels. Out of 11 sectors, 6 are trading lower along with the S&P/ASX 200. The A-REIT and Information Technology sectors were the top 2 declining sectors, down by 0.82% and 0.70% in their index values.

Also read: Mid-Market: S&P/ASX 200 Trading Lower By 0.25%; After Australia’s Job Data

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 higher in their previous session. NASDAQ Composite, NASDAQ-100, S&P 500, and Dow jones ended higher by 0.07%, 0.03%, 0.16%, and 0.47% respectively.

2. The Dow closed higher on Wednesday, propelled by data indicating a continued easing of inflation and a rally in Target that boosted retailers following better-than-expected third-quarter results. Producer prices exhibited a slower pace, increasing by 1.3% in the 12 months through October compared to a 2.2% rise in September. This result, falling short of the expected 1.9% increase, adds optimism that the trend of deflation is likely to persist. A day after consumer inflation for October revealed a more significant slowdown than anticipated, confidence in an ongoing inflation deceleration reinforced expectation that the Federal Reserve's rate-hiking cycle has concluded. This, in turn, fosters speculation about potential rate cuts in the first half of the coming year.

3. On Wednesday, Fitch, the rating agency, forecasted that U.S. regional banks would confront ongoing challenges in 2024, particularly those without significant scale or emphasizing commercial loan growth. Fitch stated that regional banks lacking substantial scale would face heightened pressure to trim costs and enhance loan portfolios. This, in turn, could diminish their ratings headroom, creating a scenario where larger players are comparatively better positioned to gain market share.

4. On Wednesday, Cisco Systems reduced its full-year revenue and profit projections, signalling a slowdown in demand for its networking equipment. This development resulted in a nearly 11% drop in the company's shares after the market closed. Cisco has been contending with supply chain challenges and a post-pandemic deceleration in demand in recent years, prompting an accelerated shift toward software offerings, particularly in cybersecurity, as part of its strategic response to the evolving market conditions.

5. The Hang Seng and FTSE 100 is up by 3.92% by 0.62%.

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