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Originally published by Rivkin Securities
US stocks declined overnight for a second session in a row. The Dow Jones was down 1.1% while the S&P 500 fared significantly better with just a 0.4% decline. This fits with industrials being the worst performing sector in the S&P, declining 2.11% while some sectors actually managed gains, including Health Care, Utilities and Consumer Staples. General Electric (NYSE:GE) will be removed from the Dow Jones for the first time in over 100 years after a sharply declining share price since late 2016 has brought the price down to less than 1/20th of the highest share price stock in the Dow Jones. As the Dow is a price weighted index, this means the weighting of GE is now less than 0.5%.
Gold prices made further losses overnight even as stock prices fell. A stronger US dollar would have contributed to the weakness with the US dollar index now at a seven-month high at 95.01. This, coupled with dovish comments from the RBA, has brought the AUD/USD down to US$0.738, a one-year low. The minutes of the most recent RBA meeting were released yesterday which showed an important change from the prior minutes whereby the comment that the next rate move would likely be up was removed. This has market watchers wondering if further rate cuts are a possibility.
The Australian share market has been holding up well recently. The ASX 200 is near 10-year highs and has gained ground over the past week despite losses in overseas markets. This morning, despite declines in US stocks, ASX 200 futures are up 37 points.
- US Current Account 10:30pm AEST
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