The ASX is expected to lose ground today after a mixed session in the US.
ASX 200 futures were trading 34 points lower, down -0.47% as of 8:20am after it closed 8 points lower, down -0.11% yesterday.
Without a US lead in due to Memorial Day, it was an uneventful day for the ASX.
Of note was the performance of uranium stocks, which tumbled on news that the Namibian government is considering nationalising resource companies.
Iron ore is also being hit hard, with commodity consultancy Mysteel suggesting prices will weaken over lower major steel product prices due to limited production cuts, weakening demand and falling costs. It notes lower demand for construction materials, with cement and concrete sales down 26.6% and 21% year-on-year respectively.
Further to this, Eastern China will enter its rainy season in June, which will affect construction progress and hinder steel trading.
Here’s what we saw (source Commsec):
US sharemarkets
There were mixed results on Tuesday, as investors felt the pressure of Republican opposition to a deal to raise the US$31.4 trillion debt ceiling.
Shares of oil giants Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM) fell by up to 0.9% after crude oil prices slid. Nvidia gained 3% to a record high as the chipmaker bets on a surge in demand for its artificial intelligence or AI chips that power chatbot sensation ChatGPT and other applications.
Shares of AI-focused company C3.ai soared 33.4% ahead of its earnings result.
Tesla (NASDAQ:TSLA) shares gained 4.1% after CEO Elon Musk visited China for the first time in three years.
Shares of Paramount Global jumped 6.4% after the CBS (NYSE:CBS) TV parent and media stock was upgraded to peer perform from underperform by Wolfe Research.
The Dow Jones index fell by 51 points or 0.2%, the S&P 500 index rose by less than 0.1% and the Nasdaq index added 42 points or 0.3%.
European markets
Dropped on Tuesday as lower oil prices weighed on the energy sector, which fell by 2.2%.
The food and beverages sector was down 2.8%. Shares of Nestle and Unilever (LON:ULVR) both fell more than 3% after they said they were replacing their finance chiefs.
Eurozone bank lending growth to businesses slowed to 4.6% in April from 5.2% a month earlier while household credit growth dipped to 2.5% from 2.9%, with the banking turmoil of March also likely proving a drag.
The continentwide FTSEurofirst 300 index fell by 1%. The commodity-heavy UK FTSE 100 index slid 1.4%, dropping to its lowest level since March.
Currencies
Were mixed against the US dollar in European and US trade.
- The Euro rose from US$1.0671 to US$1.0743 and was near US$1.0730 at the US close.
- The Aussie dollar fell from US65.53 cents to US65.01 cents and was near US65.15 cents at the US close.
- The Japanese yen lifted from 140.91 yen per US dollar to JPY139.56 and was near JPY139.75 at the US close.
Global oil prices tumbled more than 4% on Tuesday as the physical market for US crude signalled that supplies are more than adequate to meet tepid demand. There were mixed messages from major producers, which clouded the supply outlook ahead of the OPEC+ meeting this weekend.
- The Brent crude price fell by US$3.53 or 4.6% to US$73.54 a barrel.
- The US Nymex crude price was down US$3.21 or 4.4% to US$69.46 a barrel.
- Copper futures slid 0.5%.
- Aluminium futures shed 0.7%.
- The gold futures price rose by US$13.70 or 0.7% to US$1,958 an ounce.
- Spot gold was trading near US$1,959 an ounce at the US close.
- Iron ore futures slid US21 cents or 0.2% to US$105.20 a ton on falling Chinese steel prices.
RBA governor Lowe spoke to the Senate Economics Committee about interest rates and the Reserve Bank of Australia’s concerns over productivity.
On interest rates, he said, “We are trying to remind people of our seriousness about getting inflation down. If we have got an inflation mentality … inflation becomes entrenched … it will lead to higher interest rates and higher unemployment … if we had not increased interest rates as we had, the result would be even higher interest rates and unemployment. We will do what's necessary to make sure inflation does not stay high for too long."
He also raised concern over Australia’s slowing productivity.
The problem is weak productivity growth," Dr Lowe said.
"There has been no growth in productivity for the last three years.
"It's a problem for the country and it's a problem for the inflation outlook as well.
"If unit labour cost growth is 3.5 or 4 per cent, it's very hard to have inflation of 2.5 per cent."
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