The Australian share market is set to open lower today after Wall Street reversed earlier gains spurred on by a positive report that showed US retail sales in March exceeding expectations with a 0.7% increase.
ASX futures were down 0.9% to 7,720 points early this morning.
A surge in US Treasury yields and escalating tensions in the Middle East put a dampener on the rest of the day’s proceedings, prompting a downturn across the major indices.
Losses on Wall Street
The Dow dropped by 248 points, or 0.7%, despite an initial rise of more than 1%, and the S&P 500 and Nasdaq indices followed suit, sliding 1.2% and 1.8% respectively.
Technology giants such as Microsoft and Nvidia stared down substantial losses, dropping between 2% and 2.5%, while Apple's shares fell 2.2% following a 10% drop in smartphone shipments as reported by IDC for the first quarter of 2024.
Electric vehicle manufacturer Tesla announced it was cutting jobs to the tune of around 14,000, or 10% of its global workforce, and its shares immediately paid the penalty, falling 5.6%.
Salesforce also recorded a sharp fall of 7.3% amid reports of it nearing a deal to acquire Informatica.
By contrast, Goldman Sachs outperformed, gaining 2.9% after surpassing first-quarter profit expectations. Similarly, M&T Bank's shares rose by 4.7% after it projected an annual net interest income above forecasts.
Bond yields rose, reflecting expectations that the Federal Reserve may delay interest rate cuts due to robust retail sales figures. New York Fed president John Williams noted that inflation had not yet reached a turning point, anticipating rate cuts within the year.
In Europe, market reactions were mixed following a large-scale drone and missile attack on Israel over the weekend, with oil and gas stocks declining by 1.5%, while industrials and automobiles sectors saw gains.
Big supermarkets face grilling
Woolworths and Coles – dubbed ‘Colesworth’ – will face questions about price gouging and profiteering during the cost-of-living crisis at a Senate inquiry today in Canberra.
The country’s two biggest supermarkets, which control 65% of the grocery market, will be interrogated over rising profits and market concentration at a time when they could use inflation as a cover for their business practices.
Given the companies’ stranglehold on the sector, consumers and businesses alike will be watching the proceedings with interest.
Currencies and commodities
The US dollar strengthened against major currencies, with the Euro and Australian dollar losing ground.
Global oil prices edged lower as the geopolitical impact on oil supply was less severe than feared.
Base metal prices, however, surged, with aluminium hitting a 22-month high after new trade restrictions on Russian production.
Looking ahead, the focus will shift to housing and industrial production data in the US, alongside several key earnings reports. Economic growth data from China is also due, and will provide further context for global economic conditions.
Market snapshot
- Australian dollar - -0.4% to 64.4 US cents.
- Wall Street - Dow Jones (-0.7%), S&P 500 (-1.2%), Nasdaq (-1.8%).
- Europe - FTSE (-0.4%), DAX (+0.5%), Stoxx 600 (+0.1%).
- Spot gold - +1.6% to $US2,382/ounce.
- Brent crude - -0.1% to $US90.34/barrel.
- Iron ore - +1.2% to $US112.35/tonne.
- Bitcoin - -5.8% to $US63,309.
Source: ABC
What’s happening in small caps?
- Asara Resources Ltd (ASX:AS1, OTC:GMRMF) has delivered an update on recent activities, including the start of metallurgical test work at its flagship Kada Gold Project in Guinea.
- Helix Resources Ltd (ASX:HLX) has had success with induced polarisation (IP) geophysical surveys to delineate copper targets at the Bijoux copper prospect.
- Botala Energy Ltd (ASX:BTE) reports that it has made technical progress at its 100%-owned Serowe CBM Project, with ongoing gas desorption testing proving promising.
- Artemis Resources Ltd (ASX:ARV, AIM:ARV, OTCQB:ARTTF) has provided an update to shareholders on its Karratha Gold Precinct exploration program.
- AuKing Mining Ltd (ASX:AKN) will kick off an initial 1,000-metre drilling program to test the extent of copper mineralisation north of the Sandiego deposit at Halls Creek, WA.