The ASX is likely to experience a small dip today with ASX 200 futures are down 0.3% to 7,056 points after the US markets closed.
A close today below 7,115.5 would set a new six-week low on a daily close basis. If it sinks below 7,090, this would be a six-week low on an intraday day basis.
Reporting from Woolworths Group, Santos, Domino's Pizza Enterprises and WiseTech Global could have an impact. Companies trading ex-dividend include AGL Energy (ASX:AGL) (ASX:AGK), AMP, Domain Holdings Australia and Downer EDI.
The ASX200 finished 6 points (0.09%) higher yesterday at 7,121 led by IT (+5.19%), Telcos (+1.92%) and Real Estate (+1.03%). In contrast, the Consumer Staples (-2.52%), Health Care (-0.88%) and Consumer Discretionary (-0.77%) sectors underperformed.
“Yesterday was the eighth Tuesday in a row that the ASX200 started the day with the tailwind of a positive lead from Wall Street behind it. After yesterday's late rally, the ASX200 has closed higher on a Tuesday, for seven of the past eight weeks,” IG Markets analyst Tony Sycamore said.
According to Sycamore, the markets are following a pattern.
“Yesterday, we noted that the benchmark S&P500 had rallied every Monday for the past eight weeks. During the month of August, Monday’s gains have been followed by falls on Tuesday, and last night was no different.
“The financial sector was the main drag as ratings agency S&P followed the lead of Moodys (NYSE:MCO) and cut its credit ratings on several regional banks due to higher funding costs and their exposure to commercial real estate.
"The Regional Banking Index (the KRX) fell 2.66% to close at 90.69. It looks woeful technically, and a fall of another 10-15% would not surprise.”
The ASX looks to be following Wall Street’s lead.
Overnight, the S&P 500 and Dow gave back early gains as S&P Global joined Moody's in downgrading US bank ratings. US lawmakers have until September 30 before the government runs out of funding.
Macy’s was a drag. Second-quarter sales fell 8% year-on-year, which reiterated cautious full-year guidance. The company expects comparable sales to fall 6% to 7.5% in 2023.
"We experienced an increased rate of delinquencies within the credit card portfolio across all stages of age balances … the speed at which the increase occurred for us and the broader credit card industry since our Q1 earnings call was faster than planned,” CFO Adrian V. Mitchell said.
What happened yesterday?
Here’s what we saw (source Commsec):
US sharemarkets
Were mixed on Tuesday as worries lingered that the US Federal Reserve will need to keep interest rates higher for longer and as bank shares eased. Several regional and larger banks fell after S&P Global cut credit ratings and revised its outlook conditions.
The KBW regional banking index slid 2.7% and the S&P 500 banks index shed 2.4%. Shares of KeyCorp (NYSE:NYSE:KEY) and Comerica (NYSE:NYSE:CMA) dropped 4.1% each. JPMorgan Chase (NYSE:JPM) shares fell by 2.1%. Shares of Dick's Sporting Goods and Macy's (NYSE:M) slipped 24.2% and 14.1%, respectively, on cautious full-year forecasts.
Brokerage firm Charles Schwab (NYSE:NYSE:SCHW) slid 5% after it said Monday that it plans to cut jobs to save US$500 million in costs gained 3.8% after the home improvement retailer topped earnings expectations and reiterated its full-year guidance.
- The Dow Jones index fell by 175 points or 0.5%.
- The S&P 500 index dipped 0.3%.
- The Nasdaq index rose by 8 points or 0.1%.
Gained on Tuesday with interest rate-sensitive technology and real estate sector stocks both up 2%, leading the gains as a surge in bond yields paused.
Shares of Amsterdam-listed chipmakers ASML, ASM International and BE Semiconductor Industries rose by 0.7%-3.3% on optimism surrounding US-listed Nvidia's quarterly results on Wednesday. Ubisoft Entertainment (OTC:UBSFF, EPA:UBI) shares jumped 8.5% after signing a cloud streaming deal for Activision Blizzard (NASDAQ:ATVI) games.
- The continent-wide FTSEurofirst 300 index rose by 0.7%.
- The UK FTSE 100 index gained 0.2%, ending its longest losing streak since July 2019.
Were weaker against the US dollar in European and US trade.
- The Euro fell from US$1.0929 to US$1.0831 and was near US$1.0845 at the US close.
- The Aussie dollar eased from US64.57 cents to US64.09 cents and was near US64.20 cents at the US close.
- The Japanese yen dipped from 145.50 yen per US dollar to JPY146.11 and was near JPY145.90 at the US close.
Global oil prices fell by 0.5% on Tuesday as investors remained focused on the likelihood that China's economic malaise will keep hobbling demand from the world's top crude importer.
- The Brent crude price fell by US43 cents or 0.5% to US$84.03 a barrel.
- The US Nymex crude price dipped US37 cents or 0.5% to US$80.35 a barrel.
- The copper futures price gained 1%, buoyed by firm consumption data in China and more Chinese monetary support measures.
- The aluminium futures price lifted 1.5%.
- The gold futures price rose by US$3.00 or 0.2% to US$1,926 an ounce.
- Spot gold was trading near US$1,897 an ounce at the US close.
- Iron ore futures added US29 cents or 0.3% to US$106.77 a tonne on signs of improving Chinese demand.
The S&P/ASX Small Ordinaries index (XSO) gained 0.74% to finish at 2,825.10.
So far, it has been a slow morning on the news front, but you can read about the following and more throughout the day.