Equity Markets Rally on Rate Cut Hopes and Positive Economic Data

In brief: 

Strong Global Equity Performance: Global equity markets posted their best performance in nine months, driven by hopes of rate cuts from the Federal Reserve and encouraging economic reports such as lower-than-expected inflation and strong retail sales.


Fed Rate Cut Expectations: Recent economic data has caused investors to reconsider the likelihood of a 50bps cut at the Fed's next meeting in September. While a 25bps reduction remains highly likely, the probability of a larger cut has decreased from 50% to approximately 25% over the past week.


Australian Corporate Earnings Overview: The Australian reporting season has provided mixed insights into the economic landscape, with a balanced number of companies exceeding, meeting, or falling short of modest expectations. Notably, AMP and Telstra Group exceeded expectations while Suncorp Group fell short, highlighting ongoing challenges within its operations.

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