The ASX has ended the day slightly higher following a mixed session on Wall St overnight.
Consumer staples were the worst of the 11 sectors, losing 1.04% led by declines in Woolworths Group Ltd, down 1.1%, while Coles Group Ltd shed 0.8% and Endeavour Group Ltd fell 1.5%.
Health care also closed lower, offsetting gains in the energy sectors which tracked the oil price higher as Israel held off on invading Gaza.
The ASX 200 is now down 2.6% since the start of the financial year, with the ASX Small Ords down 6.5%, while the tech (+19.2%) and gold (+16.7%) indices are the standouts to date.
Morgan Stanley (NYSE:NYSE:MS) has warned that the chance of a year end rally on Wall St is fading and we could see further declines in the S&P 500 before the new year. The bank’s Michael Wilson said, “earnings expectations [are] likely too high for the fourth quarter and 2024 and policy tightening likely to be felt from both a monetary and fiscal standpoint”.
So far the charts support that view with the US benchmark index closing below its 200-day moving average on Friday for the first time since March.
Eyes on the RBA
New Reserve Bank of Australia governor Michele Bullock is scheduled to give a speech at 7pm tonight (AEDT) — her first prepared address since stepping into the role.
While there’s still two weeks to go until the RBA announces its next rate decision, there’s speculation that higher fuel prices could make all the difference. Petrol prices gained 7% in the September quarter, and oil prices have since risen further as Middle East tensions escalated.
We’ll know more once September quarter inflation data arrives later this week after almost nine months of steady declines. Some suspect inflation will tick higher, given the higher fuel prices and given last week’s relatively strong employment data.
That’s a reversal from a growing consensus, just a fortnight ago, that the RBA was done raising rates for now.
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