Aussie stocks are in for another green start despite a red finish on Tuesday.
Benchmark futures point to a 0.85% jump at the open, bringing the ASX 200 58 points higher come the morning bell.
What’s new on Wall Street?
New York markets languished on the first trading day of the new year — all four major indices finished in the red overnight.
The Nasdaq led with a 0.76% drop in value, trailed closely by a 0.61% fall on the Russell 2000.
One year on from a bull market high, IG analyst Tony Sycamore said Wall Street closed lower on fears of recession, higher interest rates and an upcoming hit to corporate earnings.
Overall, just under half of stocks declined and 53% are trading below their 200-day moving average.
Only four of the S&P’s 11 sectors clinched a green finish, while energy reversed late-year wins to take out the wooden spoon overnight.
Among the large caps, Tesla (NASDAQ:TSLA) shares hit a new rock bottom, dropping 14% to track its worst session since September 2020 after the EV maker missed its production targets for the third quarter running.
Apple shares (NASDAQ:AAPL) also slumped, shedding nearly 4% overnight. It brings the tech giant one step closer to finishing below a $2 trillion market cap for the first time in two years.
Overall, it’s a rough start to the year for US markets — and prolonged volatility indicates they’re not out of the woods just yet.
Commodities and currency
On the energy front, crude oil moved into red territory and reversed its fortunes from late December trade.
A barrel of West Texas Intermediate is now trading 4.39% lower, changing hands for US$76.74.
Commenting on the rort, Oanda senior market analyst Ed Moya said oil prices were tumbling as risk aversion sends the dollar higher and dampens expectations that the crude demand outlook would improve anytime soon.
“China’s reopening has too many question marks as hospitals are overwhelmed and medical supplies run low,” he explained.
“Crude prices could struggle here as a strong dollar could be here to stay as investors can’t pass up the yield they are getting in fixed income.
“Manufacturing activity globally mostly appears to be stuck in contraction territory and that might not improve until the end of the quarter.”
Conversely, gold has started the new year on a high, jumping another 0.91% overnight. The precious metal is fetching US$1,842 an ounce.
“Gold is riding a nice wave of falling Treasury yields, safe-haven flows as recession risks rise, and an improving outlook for jewellery demand across China and India,” Moya said.
“The precious metal should see strong inflows as stock market sellers appear to be clearly in control.
Moya concluded that gold has massive resistance at the US$1,900 level, but it could be tested by the end of the quarter.