The ASX is expected to open in the red this morning, following US markets lower and ahead of this morning’s release on June quarter GDP data. The ASX SPI 200 Futures are trading down 94 points (-1.17%) to 7,971.
The ABS is due to release June quarter GDP data at 11:30am AEST.
Bloomberg economists believe economic growth was likely ‘anaemic’ in the June quarter, up just 0.2%, seasonally adjusted, on a quarter-on-quarter basis. This would be slightly higher than the 0.1% growth rate in the March quarter, but “very weak when surging population growth is taken into account”.
CBA economists lifted their forecasts to 0.4%, up from 0.2%, while NAB economists forecast 0.3% growth, ANZ economists expect 0.1% quarter-on-quarter growth and Westpac economists expect a 0.3% increase.
Ovenight, the Dow Jones index fell by 626 points or 1.5%, while the S&P 500 index dipped 2.1% and the Nasdaq index shed 577 points or 3.3%. All three indexes notched their worst days since the global equity market sell-off on August 5.
Markets fell as investors assessed subdued US factory activity data ahead of a slew of labour market reports due through the week that could influence the extent of monetary policy easing by the US Federal Reserve.
Nvidia’s shares dropped 9.5% overnight, with the chipmaker losing US$278.9 billion of market value in the biggest one-day market cap decline for any US company, ever. However, Nvidia is still up 118% for the year.
Renewed worries about a slowing economy gripped US investors, echoing a sharp selloff that rattled global financial markets just a month ago.
- Alongside Nvidia, other Megacaps tumbled with Alphabet (NASDAQ:GOOGL) down 3.7% and Microsoft (NASDAQ:MSFT) losing 1.9%.
- A drop in chip stocks also dragged the Philadelphia SE Semiconductor index down 7.8%, the most since March 2020.
- Advanced Micro Devices (NASDAQ:AMD), KLA, Micron Technology (NASDAQ:MU) and On Semiconductor slid between 7.8% and 9.5%.
- Intel (NASDAQ:INTC) fell 8.8% after it announced new laptop processors that can run artificial intelligence programs on the device itself, instead of relying on servers in the cloud.
- Boeing (NYSE:BA) lost 7.3% after Wells Fargo (NYSE:WFC) downgraded the planemaker's shares to "underweight" from "equal weight".
European sharemarkets had their worst session in nearly a month, as US manufacturing data brought concerns about a slowdown in global growth back to the forefront ahead of an all-important US jobs report on Friday.
Stocks in France, Germany, Spain and Italy dropped between 0.9% and 1.3%. The energy and basic resources sectors led declines, down 2.8% and 3.3% respectively, with the resource sector seeing its worst day since October 2023.
- The continent-wide FTSEurofirst 300 index slid 1%.
- In London, the UK FTSE 100 index ended down 0.8%, with precious metals miners 3.7% lower.
Currencies
Currencies were mixed against the US dollar in European and US trade.
- The Euro fell from US$1.1067 to US$1.1026 and was near US$1.1040 at the US close.
- The Aussie dollar eased from US67.52 cents to US67.06 cents and was near US67.10 cents at the US close.
- The Japanese yen rose from 146.38 yen per US dollar to JPY145.15 and was near JPY145.55 at the US close.
Commodities
Global oil prices dropped almost 5% on Tuesday to their lowest levels in nearly nine months on signs of a deal to resolve a dispute that has halted Libyan production and exports.
- The Brent crude price shed US$3.77 or 4.9% to US$73.75 a barrel.
- The US Nymex crude price dropped US$3.21 or 4.4% to US$70.34 a barrel, both at the lowest since December
Base metal prices slumped on Tuesday, driven down by a stronger US dollar and concerns that a weak Chinese economy is curbing demand in the world's biggest metals consumer.
- Copper futures slid 2.7%,
- Aluminium futures slipped 2%.
The gold futures price fell US$4.60 or 0.2% to US$2,523 an ounce on Tuesday, pressured by a firmer US dollar. Spot gold was trading near US$2,492 an ounce at the US close.
US iron ore futures were unchanged at US$100.55 a tonne on Tuesday following the US Labor Day holiday. The iron ore price fell US$3.18 or 3.3% to US$93.42 a tonne in Singapore trade as China's steel market shows few signs of revival.
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