The ASX is likely to open lower this morning with the SPI 200 futures down 30 points, or 0.38% to 7,970 points.
The Dow Jones fell by almost 400 points (1%) on Wall Street overnight, the tech-heavy Nasdaq also lost 1%, while the S&P 500 index shed 0.7%.
Bond yields continued to push higher. US 10-year bond yields lifted to near 4.36%, as traders forecast just two US rate cuts in 2024. That comes despite Federal Reserve official Loretta Mester saying three rate cuts are “still reasonable,” while US manufacturing data came in stronger than expected.
Gold stocks could find favour today with gold prices hitting another all-time high of US$2,280 an ounce overnight.
What happened overnight?
(Source Commsec):
US markets
US sharemarkets dropped on Tuesday, dragged down by rising longer-dated US Treasury yields and Tesla (NASDAQ:TSLA), as strong US economic data fuelled uncertainty about the timing of interest rate cuts from the US Federal Reserve.
The Dow Jones index fell by 397 points or 1%, the S&P 500 index dipped 0.7% and the Nasdaq index shed 156 points or 1%. It was the worst day since March 5 for the Dow and S&P 500.
- Shares of rate-sensitive growth stocks including Nvidia, Microsoft (NASDAQ:MSFT) and Amazon.com (NASDAQ:AMZN) fell between 0.2% and 1%.
- Tesla tumbled 4.9% after the electric car maker posted fewer quarterly deliveries for the first time in nearly four years.
- Shares of UnitedHealth (NYSE:UNH), CVS Health (NYSE:CVS) and Humana (NYSE:NYSE:HUM) fell between 6.4% and 13.4% as the US Government kept reimbursement rates for providers of Medicare Advantage health plans unchanged, in a setback to insurers.
- Calvin Klein-parent PVH Corp (NYSE:PVH)'s shares tumbled 22.2% after the retailer forecast an 11% drop in first-quarter revenue. Peer Ralph Lauren (NYSE:RL) slid 4.6%.
European markets
European sharemarkets made a downbeat start to the second quarter on Tuesday, pressured by healthcare shares, which dipped 1.7%.
- The continent-wide FTSEurofirst 300 index closed 0.8% lower.
- In London, the UK FTSE 100 index slipped 0.2% after notching a more than one-year high earlier in the session.
Siegfried Holding lost 5.4% as the Swiss pharmaceutical company's CEO Wolfgang Wienand is set to step down to join Lonza.
Retail, real estate and travel and leisure stocks also dropped more than 2% each.
Inflation in Europe's largest economy, Germany, slackened in March to 2.3%, its lowest level since June 2021 (survey: 2.4%). German consumer prices, harmonised to compare with other European Union countries, had risen by 2.7% year-on-year in February.
Currencies
Currencies were stronger against the US dollar in European and US trade.
- The Euro rose from US$1.0723 to US$1.0777 and was near US$1.0765 at the US close.
- The Aussie dollar lifted from US64.85 cents to US65.22 cents and was near US65.15 cents at the US close.
- The Japanese yen firmed from 151.78 yen per US dollar to JPY151.47 and was near JPY151.60 at the US close.
Commodities
Global oil prices advanced 1.7% on Tuesday to the highest level since October. Oil supplies faced fresh threats from Ukrainian attacks on Russian energy facilities and escalating conflict in the Middle East.
- The Brent crude price rose by US$1.50 or 1.7% to US$88.92 a barrel.
- And the US Nymex crude price added US$1.44 or 1.7% to US$85.15 a barrel.
Base metal prices climbed on Tuesday.
- Copper futures lifted 0.6% as strong factory data from China and plans to cut production by smelters in the top consumer triggered buying.
- Aluminium futures gained 1.6%.
On Tuesday, the gold futures price rose by US$24.70 or 1.1% to US$2,281.80 an ounce as traders snapped up the safe-haven asset amid growing Middle East tensions. Spot gold was trading near US$2,276 an ounce at the US close after hitting an all-time high of US$2,276.89.
Iron ore futures gained US58 cents or 0.6% to US$102.91 a tonne on Tuesday after Chinese factory activity snapped a five-month contraction in March, adding to signs of a modest recovery.
What’s on?
In Australia, Ridley Corp trades ex-dividend. The Caixin China services index is due. European consumer price data is scheduled.
In the US, the ADP (NASDAQ:ADP) employment report is released with the ISM and S&P Global services indexes. US Federal Reserve chair Jerome Powell speaks. Blackberry (TSX:TSX:BB) and Levi's both release earnings. OPEC+ producers meet
On the small cap front
The S&P ASX Small Ordinaries ended 0.06% lower yesterday, while the ASX 200 lost 0.11%.
You can read more about the following throughout the day.