The ASX is expected to divert from a turbulent session on Wall Street overnight and make its way into the green this morning.
Futures imply the benchmark index will open 29 points or 0.41% higher at 7,177.
What’s new on Wall Street?
New York’s major indices failed to break out of a slump in Monday’s session, deterred by China’s reinforced COVID lockdowns.
The NASDAQ was down 1.09%, followed by a 0.55% loss on the Russell 2000. The S&P and the Dow trailed with 0.39% and 0.13% falls.
Even still, only 53% of stocks declined and seven of 11 sectors finished in the green.
Consumer staples stocks led the day with a 0.98% gain, while consumer discretionary companies proved the polar opposite, notching a 1.41% loss.
Other growth-heavy stocks (such as technology) also failed to pack a punch — the sector closed the day with a 1.13% fall as investors pivot to defensive investments.
Unpacking why that might be, OANDA senior market analyst Ed Moya said the US economy was also in jeopardy of an unwanted supply-chain hit as rail workers appeared poised to strike just before the holidays.
“After a key vote, it is looking less likely that we won’t see some possible work stoppages, which could prove to be terrible for economic activity and prove to be inflationary,” he explained.
“If a deal is not reached early next month the hit to the economy could be over $2 billion a day."
Looking at the large-cap news, Disney gained 5.8% after ex-CEO Bog Iger returned from retirement on a mission to boost the entertainment company’s growth.
Meanwhile, Tesla (NASDAQ:TSLA) shares couldn’t reverse the rout, dropping another 6.6% to reach their lowest level in two years.
In a topsy-turvy session, not even the Aussie miners could break beyond the red: BHP (ASX:BHP) closed down 2.4%, while Rio finished with a 1.4% loss.
Commodities and currency
Oil prices are down for a fourth straight day after one of China’s largest cities imposed a five-day lockdown and oil giant Saudi Arabia ruled out any production increases.
Commenting on the rout, Moya said oil was going to have trouble finding a floor with a deteriorating crude demand outlook for the world’s largest economies.
“Until we get some positive news from either China or the US, the dollar will continue to rebound and crude’s path appears to be headed lower,” he said.
Gold also failed to break out of its red streak, down a further 0.81%, while iron ore futures fell 1.2% to US$92.75 a tonne.
And crypto continues its downward spiral — crypto exchange Coinbase (NASDAQ:COIN) saw shares hit a new low overnight, trading at US$40.61.
Bitcoin gave up another 4.71%, while Ethereum dived 6.44% into the red.
The Aussie dollar is 1.04% weaker against US currency, buying slightly more than 66 US cents.
On the ASX
Software company TechnologyOne is out with earnings before the morning bell.
The company’s net profit jumped 22% to $88.8 million by the end of September, sparking a 2-cent special dividend on top of a 10.28-cent final dividend.
Meanwhile, burn tech biotech Polynovo is in the news as it readies for a capital raise.
It’s not yet clear how much the company is aiming to pocket, but investors should know more by the time shares re-enter trade on November 24.
In small cap news today, Altech Chemicals Ltd (ASX:ATC) plans to change its name to Altech Batteries, reflecting a pivot in direction centred on battery storage.
Finally, Tietto Minerals Ltd (ASX:TIE) is rolling out its ‘drill and build’ development strategy as it aims to grow the gold at its flagship Abjuar Project Côte d’Ivoire, West Africa.