For the second day in a row, Australian shares are expected to open lower, with investor sentiment dampened by the receding potential for an interest rate cut from the Reserve Bank of Australia ahead of the holiday season.
On Wall Street, US markets closed lower overnight led by technology sector declines.
The Dow Jones Industrial Average slipped by 91.5 points, or 0.2%, while the S&P 500 dipped 0.3% and the Nasdaq fell by 0.6%.
Investors reacted to mixed corporate earnings and strong economic data, which slightly reduced prospects of an interest rate cut by the US Federal Reserve.
Garmin surged 23.3% on a strong quarterly performance, while Alphabet (NASDAQ:GOOGL) gained 2.8% as its cloud and YouTube advertising revenues exceeded expectations.
However, semiconductor stocks faced pressure: Advanced Micro Devices (NASDAQ:AMD) and Qorvo issued downbeat forecasts, resulting in respective losses of 10.6% and 27.3%. Super Micro Computer plunged 32.7% after Ernst & Young resigned as its auditor.
In Europe, shares slid, with the FTSEurofirst 300 index sliding 1.2% and the UK’s FTSE 100 falling 0.7% following UK Finance Minister Rachel Reeves' announcement of significant tax hikes in her first budget.
The technology sector, including chipmakers, was down 2.5% following a bearish outlook from Belgium-based Melexis.
US economic data spoke to a resilient economy, with the Gross Domestic Product (GDP) expanding at a 2.8% annualised pace in the September quarter and private payrolls increasing by 233,000 jobs in October.
US bond yields rose as markets await Friday’s October jobs report and the US 10-year Treasury yield rose to 4.29%.
Woolworths AGM
Back home, supermarket giant Woolworths will hold its annual general meeting (AGM) in Sydney this morning, with investors expected to seek clarity on the company’s recent trading update, which saw its share price fall by 6.1% yesterday.
Woolworths projected an Earnings Before Interest and Taxes (EBIT) range of A$1.48-A$1.53 billion for its Australian food division in the first half of the financial year – a 4-7% decline from the previous year’s figures.
Shareholders will likely look for insights into the factors affecting this outlook and any strategies Woolworths might employ to bolster its financial performance in the months ahead.
The meeting will also address environmental concerns as activist shareholders push Woolworths to reconsider its sourcing practices, specifically its procurement of farmed salmon from Macquarie Harbour in Tasmania.
The area is home to the endangered Maugean skate, with estimates suggesting that only 40 to 120 adults remain in the wild.
Resolutions tabled by a small group of shareholders include a request for Woolworths to cease sourcing salmon from this region by April 2025 and to report on the effects of its farmed seafood operations on threatened species.
Currencies and commodities
Currencies were mixed against the greenback in recent trade as investors responded to economic data and policy developments.
The Euro strengthened, rising from US$1.0807 to US$1.0870, holding close to US$1.0860 at the US close.
The Australian dollar also saw an uptick, climbing from US$0.6538 to US$0.6595 and settling near US$0.6575 as trading concluded.
Meanwhile, the yen weakened, moving from JPY152.80 per US dollar to JPY153.47, ending close to JPY153.35.
In commodity markets, crude oil prices rose around 2% following an unexpected draw in US inventories.
Gold hit a record high of US$2,800.80 per ounce amid heightened geopolitical uncertainty, while base metals edged lower as investors awaited updates on China’s economic stimulus.
Looking ahead, key Australian data on retail trade, building approvals, and private sector credit will be released, while major corporate AGMs are scheduled for companies including AMP, JB Hi-Fi and Woolworths.