Weekly Wrap 7 November

Thank you for joining us this Friday 7^th November, I’m Sophia Mavridis a market analyst with Bell Direct and this is the weekly market update.

While global policy uncertainty continues to generate volatility, the domestic economy remains resilient; relatively shielded from the worst impacts of global trade headwinds. This month we’ve seen some risk and reward – the market is punishing companies that miss earnings expectations, underscoring the importance of high-quality stock picks.

As we look back on the month of October, the global and domestic economic highlights included US policy and some geopolitical developments. The US Fed delivered its second consecutive 25 basis point rate cut in October, setting the benchmark to a 3.75%- 4% range, largely anticipated due to a cooling labour market. However, Fed Chair Powell adopted a cautious tone, warning that a December cut is “not a foregone conclusion” given persistent economic uncertainty and “sticky inflation”.

And over the last month we saw two significant shifts in the geopolitical landscape. Tensions in the Middle East continued to ease, which has reduced recent oil price volatility and mitigated a key global inflation concern. Plus, a recent trade discussion between US and China Presidents was seen as a move to stabilise US-China relations, although the underlying rhetoric regarding tariffs remains unchanged.

Locally, domestic data and commentary from the RBA in October have shifted market expectations. Governor Bullock noted that while the labour market is cooling, it remains “a little tight”, and recent inflation data was higher than expected. And the hawkish tilt for interest rates extinguished hopes for another RBA rate cut this year, with the market now pushing expectations for further easing out to 2026. This suggests the RBA is just waiting and watching, assessing the full impact of the previous cuts.

Local markets reflected this uncertainty, with the ASX200 experiencing a volatile month. The index rallied to fresh highs mid-month, but faced sharp pullbacks, ultimately closing October with only a modest gain. The market’s performance was weighed down by significant, stock- specific shocks within several large-cap companies. Meanwhile, small-caps entered the month with strong momentum, having significantly outperformed large caps in the third quarter. Despite “risk-off” volatility, this segment continues to underscore our core preference.

As for key risks to watch: we’re seeing elevated valuations in global markets and some potential for a stagflationary environment in the US, which presents a near-term headwind for global and domestic equities, so consider growth companies with relatively defensive earnings. Plus, there is also the risk of Chinese stimulus, likely to act as a potential tailwind for the resources sector.

Therefore, October was a big month in markets.

As for the first trading week of November: the ASX200 has declined 0.64% this week so far, with consumer discretionary, real estate and utilities weighing on the market the most, while financials and energy are in the lead.

On the ASX200 leaderboard, the best performing stock is Emerald Resources (ASX:EMR) as energy gains over 1%, while the James Hardie Industries (ASX:JHX) dropped over 21% this week, following increased trading volume that prompted an ASX inquiry into undisclosed information.

And the All Ords was lead by gold and silver producer Kingsgate Consolidated (ASX:KCN) this week, closely followed by Core Lithium (ASX:CXO), while the worst performing stock was Polymetals Resources (ASX:POL).

As for the most traded stocks by Bell Direct these include Wagners Holdings Company (ASX:WGN) ahead of their AGM next week, Bannerman Energy (ASX:BMN), after announcing a change in director’s interest involving share sales for tax liabilities, and BHP Group (ASX:BHP). Clients also bought into CSL Limited (ASX:CSL) and WiseTech Global (ASX:WTC), while took profits from Northern Star Resources (ASX:NST), Pilbara Minerals (ASX:PLS), Commonwealth Bank (ASX:CBA), Lynas Rare Earths (ASX:LYC), and National Australia Bank (ASX:NAB).

And the most traded ETFs by Bell Direct clients this week were the BetaShares Australian High Interest Cash ETF (ASX:AAA), the Vanguard Australian Shares ETF (ASX:VAS) and the BetaShares Nasdaq 100 ETF (ASX:NDQ).

And to end on the economic news items to watch out for next week. Building permit data will be released on Monday. On Tuesday we’ll receive Westpac’s consumer confidence data for November and NAB’s business confidence data for October. And on Thursday, unemployment data for October will be released. The unemployment rate is expected to fall to 4.4%.

And that’s all for this week. I’m Sophia Mavridis with Bell Direct. Have a good Friday and we’ll see you next week.

This information is general in nature and does not take into account your financial situation, objectives or needs. You should consider whether it is appropriate for you. You should read our Financial Services Guide and any relevant Product Disclosure Statements before making an investment. For more information visit belldirect.com.au or call 1300 786 199. Bell Direct is the trading name of Third Party Platform Pty Ltd ABN 74 121 227 905, AFSL 314341.