Wall St continued to pull back overnight led by tech losses and the ASX is set to follow suit. ASX 200 futures are trading 35 points lower, down -0.49% as of 8:20 am AEST.
Apple Inc (NASDAQ:AAPL) shares fell 3.6% after China ordered central government officials not to use iPhones and other foreign-branded devices for work or bring them into the office.
Unfortunately, the US economy continues to run hot, which has made Wall St nervous about the possibility of further rate hikes by the US Federal Reserve.
Inflation and bond yield headwinds are having a clear impact in the US while circumstances in China continue to muddy the waters.
Oil and gas investors are currently the winners. Oil hit its highest levels since November 2022 at $90 per barrel, which doesn’t help the fight against global inflation.
Uranium prices were also higher. Over the past two months, uranium has gained 5% as supply risks and production downgrades bite.
According to Morgan Stanley (NYSE:NYSE:MS) analysts, “The Sprott physical uranium fund has not reported any purchases since late April, but with the discount of market price to NAV narrowing, this could trigger more purchases, as seen in Feb 2023 and Sep/Oct 2022."
Good news in the UK came from Bank of England governor Andrew Bailey who hinted that the central bank may be close to stopping rate hikes.
UK inflation is currently 6.8%, only 1.8% behind the 5% annual inflation target set by PM Rishi Sunak.
“I think we are much nearer now to the top of the cycle,” Bailey told a panel of cross-party lawmakers.
“And I’m not therefore saying we’re at the top of the cycle because we’ve got a meeting to come but I think we are much nearer to it,” he added.
What happened yesterday?
Here’s what we saw (source Commsec):
US markets
Declined on Wednesday after stronger-than-expected US services sector data fuelled concerns of sticky inflation and interest rates staying higher for longer. Apple shares (NASDAQ:AAPL) fell by 3.6% following a report that Chinese agencies are barring the use of iPhones at work.
Other megacaps also declined, with Tesla (NASDAQ:TSLA), Amazon.com (NASDAQ:AMZN) and Nvidia shares down between 1.4% and 3.1% as bond yields rose. Lockheed Martin (NYSE:NYSE:LMT) shares shed 4.8% after the US weapons maker trimmed the delivery outlook for its F-35 jets. Shares of miner Albemarle slid 5.5% on worries about lithium demand from top consumer China.
- The Dow Jones index fell by 199 points or 0.6%.
- The S&P 500 index dipped 0.7%.
- The Nasdaq index shed 148.5 points or 1.1%.
Extended losses to a sixth consecutive session on Wednesday as worries about slowing global growth dented risk appetite, while rising bond yields also pressured equities. Household goods led losses, down by 2.7%, followed by banks, which dropped 1.5%. Data showed German factory orders fell by 11.7% in July (survey: -4.3%).
- The continent-wide FTSEurofirst 300 index slipped 0.6%.
- The UK FTSE 100 index fell by 0.2%.
Were weaker against the US dollar in European and US trade.
- The Euro fell from US$1.0747 to US$1.0704 and was near US$1.0725 at the US close.
- The Aussie dollar slid from US64.04 cents to US63.67 cents and was near US63.80 cents at the US close.
- The Japanese yen fell from 147.02 yen per US dollar to JPY147.73 and was near JPY147.65 at the US close.
Global oil prices traded near nine-month highs on Wednesday Saudi Arabia lifted official selling prices for its flagship Arab Light crude to Asia to a ten-month high, a signal of its confidence in demand.
- The Brent crude price rose by US56 cents or 0.6% to US$90.60 a barrel.
- The US Nymex crude price gained US85 cents or 1% to US$87.54 a barrel.
- The copper futures price slid 1.6% and the aluminium futures price fell by 0.2%, as the US dollar strengthened and German factory orders slumped, highlighting a weak global economy.
- The gold futures price fell by US$8.40 or 0.4% to US$1,944.20 an ounce.
- Spot gold was trading near US$1,916 an ounce at the US close.
- Iron ore futures added US$1.84 or 1.6% to US$118.97 a tonne after miner Vale said the outlook for China's property sector was looking "more encouraging."
The S&P/ASX Small Ordinaries index (XSO) lost 0.81% yesterday to 2,812.90.
It has been a slow start on the news front, but you can reads the fiollowing and more throughout the day.