Global markets were almost in a sea of red as commodity prices weighed on the major indexes. What to look out for on the ASX today.
S&P 500 snaps two-day rally on Powell testimony
US stocks closed with fractional losses after Federal Reserve Chair Jerome Powell reaffirmed his pledge to suppress inflation and also acknowledged the risk of an economic slowdown – a recession. Testifying in the Senate, investors didn’t hear any explicit colour on the future size of interest rate hikes, however, he tacitly admitted that the central bank had failed to get its job done, saying that a soft landing would be difficult to navigate.
Stocks lacked conviction during the session, moving through gains and losses. Investors bought back in when Powell said that the Fed would review incoming economic data. Stocks then turned lower when he said that the Fed will focus on getting inflation down to its target.
At the closing bell, the Dow Jones fell 0.2 per cent to 30,483, the S&P 500 lost 0.1 per cent to 3,760 and the Nasdaq closed 0.2 per cent lower to 11,053.
Oil prices fell 3 per cent which put downward pressure on energy stocks. They were the worst performer on the S&P 500, down 4.2 per cent, followed by materials by 1.3 per cent. Industrials and information technology lost up to 0.5 per cent each. The four winners were real estate, up 1.6 per cent then healthcare, added 1.4 per cent followed by utilities and communication services.
Let’s go straight to what this means for Aussie markets today.
Figures around the globe
European markets closed lower. Paris fell 0.8 per cent, Frankfurt lost 1.1 per cent, while London’s FTSE closed 0.9 per cent lower. On the London Stock Exchange, Rio plunged 4.4 per cent, BP lost 3.1 per cent and Shell dropped 3.5 per cent.
Asian markets closed lower, Tokyo’s Nikkei lost 0.4 per cent, Hong Kong’s Hang Seng dropped 2.6 per cent while China’s Shanghai Composite closed 1.2 per cent lower.
Yesterday, the Australian sharemarket lost 0.2 per cent to 6,509.
Taking all of this into the equation, the SPI futures are pointing to 0.4 per cent gain.
What to look out for today on the ASX
In economic news, the Australian Bureau of Statistics is set to release five reports. Out of the five, the March quarter finance and wealth and the June business conditions and sentiments will take a bit of attention. The May labour force detailed estimates are due. This will contain data that wasn’t available in the first release where we received the headline job figures.
The biotech sector rose again on Wall St, following the news from Pfizer’s recent US$95 million. Real estate was also a winner. These two sectors might be in the spotlight while energy could take a breather today on the ASX if we take this US lead.
We continue to follow the story of coal miners here at Finance News. Last night, executive chairman of Bowen Coking Coal (ASX:BCB) Nick Jorss said he was “extremely disappointed in the way this massive royalty hike has been implemented without any consultation upon an industry”.
The share price tumbled 47 per cent when the Qld government released the news on Tuesday. It clawed back almost half of its losses yesterday, adding 21.4 per cent to 25.5 cents. Keep an eye out for another Queensland coal miner Coronado Global (ASX:CRN) and others like New Hope (ASX:NHC) and Terracom (ASX:TER). To find out more about this, join me here for “Coal miners rebound after QLD unveils new coal royalties”.
BHP and Rio Tinto on Wall St tumbled around 4 per cent each. Iron ore futures are flat. Keep an eye out for the iron ore miners, including Fortescue Metals (ASX:FMG).
According to the AFR, ANZ Bank (ASX:ANZ) has reached out to UBS and Macquarie Capital for advice on its plans to buy accounting software company MYOB. No figures about the deal are available, however, KKR paid $2.4 billion for it in 2019.
There is one company set to make its debut on the ASX today. Keep an eye out for Leo Lithium (ASX:LLL) after raising $100 million at 70 cents per share.
Iron ore has lost 5.6 per cent to US$109.40. Its futures are flat.
Gold has lost $0.40 or 0.02 per cent to US$1838 an ounce. Silver was down $0.35 or 1.6 per cent to US$21.50 an ounce.
Oil has lost $3.33 or over 3 per cent to US$106.19 a barrel.
One Australian Dollar at 7:10 AM has weakened since yesterday, buying 69.28 US cents (Wed: 69.71 US cents), 56.51 Pence Sterling, 94.36 Yen and 65.55 Euro cents.
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Source: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics