It will be a weak start to the market this morning, according to ASX Futures which are pointing to an 11-point or 0.14% slip in early trading on the back of a weak overnight performance for US markets and a 0.21% dip in iron ore prices.
February reporting season is also drawing to an end, lowering the volatility of the market overall. Atlas Arteria, Karoon Energy, Ramsay Health Care, Southern Cross Media and Cromwell Property are among those still to report for the quarter.
What happened overnight?
(source: Commsec)
US markets
Investors moved with caution in overnight trading, with US markets pulling back slightly as the US awaits personal consumption expenditure (PCE) inflation data, the US Fed’s preferred metric to measure inflation.
Analysts believe the US Central Bank is still walking a fine line between controlling inflation and recession, suggesting the Fed will need to maintain the spectre of possible rate cuts to keep the market, and thus inflation, under control.
“Wall Street equities pulled back, partly due to some firm Fed-speak and partly due to GDP data, which saw a downward revision to growth and an upward revision to prices in the fourth quarter,” Capital.com market analyst Kyle Rodda explained.
“The moves were ultimately modest and reflect a level of nervousness heading into tonight’s PCE Index data. Analysts predict core prices to drop to 2.8% and headline prices to decline to 2.4% – strong evidence of ongoing disinflation if it occurs.
“Despite the overall confidence that price growth will continue to moderate, resilient economic activity continues to lead to a pricing-out of Fed rate cuts this year.
“Fed Fund Futures indicate only three full cuts are baked-in, down from the more than six implied at the end of last year. Arguably, the dynamic represents a small victory for Fed policy and forecasting.
“Even as the central bank has 'pivoted' its policy stance, it has consistently said that it thinks the US economy will remain resilient and that rates will only be cut three times this year to effectively keep real policy rates around 2% to 2.25%.”
Major tech stocks slipped in overnight trading. Nvidia dropped a further 1.3% from a record high, Apple (NASDAQ:AAPL) slid 0.7% and semiconductor equipment supplier Applied Materials (NASDAQ:AMAT) lost 2.6% from its share price after the US Securities and Exchange Commission issued a subpoena.
eBay (NASDAQ:EBAY) climbed on beating reporting expectations, up 7.9%, with Urban Outfitters (NASDAQ:URBN) moving the other direction, falling a full 12.8% for the opposite reason.
Bitcoin hit more than US$60,000 overnight, within striking distance of an all-time high. Major crypto firms reaped the rewards; Coinbase (NASDAQ:COIN) Global and Marathon Digital (NASDAQ:MARA) climbed 0.8% and 2.4% respectively.
The Dow fell 0.1% or 23 points, the S&P500 0.2% and the Nasdaq 0.6% or 87.5 points.
European markets
Markets in Europe also fell overnight. Corporate earnings reports weighed heavily – Real Estate stocks slipped to a three-month low after shedding 1.8% on a weak performance from Taylor Wimpey (LON:TW); the UK homebuilder slipped 4.8% itself.
British financial advice company St James's Place shed an eye-watering 18.6% after reporting an annual loss.
The FTSE300 fell by 0.3% and the FTSE100 0.8%.
Currencies and commodities
Currencies were mixed against the US dollar. The Euro rose from US$1.0796 to near US$1.0835 at the US close.
The Aussie dollar slipped from US65.18 cents to near US64.95 cents and the Japanese Yen eased from 150.55 yen to near JPY150.70 at the US close.
Oil prices were mixed despite higher US crude inventories, which almost doubled market expectations by rising by 4.2 million barrels instead of the 2.74 million expected.
Brent rose 0.04% to US$83.68, but US Nymex fell US33 cents or 0.4% to US$78.54 a barrel.
Base metals didn’t see a lot of activity – copper futures were flat and aluminium futures dipped 0.2%. Iron ore also slipped, shedding 0.21% with futures down 0.4% to US$125.36 a tonne on concerns about Chinese steel demand.
Gold futures fell US$1.40 or 0.1% to U$2,042.70 an ounce overnight, and spot gold was trading around US$2,033 an ounce at the US close.
On the small cap front
The ASX Small Ordinaries rose 18.5 points or 0.63% yesterday, beating out the ASX’s disappointing 0.13% dip.
You can read about the following and more throughout the day on our website.