Australian shares are expected to open lower this morning with the markets convinced that the RBA will keep interest rates at the 12-year-high of 4.35% when it announces its decision later today.
There is a 95% probability that the rates will stay on hold, according to data from Refinitiv.
‘Down down’ for Coles and Woolworths
Shares in Coles Group and Woolworths fell sharply yesterday afternoon, following the announcement by the Australian Competition and Consumer Commission (ACCC) that it has filed Federal Court proceedings against the two supermarket giants.
The ACCC alleges that both companies have systematically misled customers regarding the extent of discounts offered in their stores.
This has sparked concerns across the retail sector, as investors anticipate potential regulatory fines or reputational damage.
In the US, sharemarkets continued their upward trajectory yesterday, buoyed by comments from Federal Reserve policymakers and positive business activity data.
The Dow Jones increased by 61 points or 0.2%, while the broader S&P 500 added 0.3%, reaching fresh record highs, and the Nasdaq posted a smaller gain of 0.1%.
Leading the market were tech and rate-sensitive growth stocks, with Tesla surging 4.9% and Meta Platforms rising 0.6%, after Citigroup lifted its price target for the social media giant.
Intel also jumped 3.3% after reports surfaced that Apollo Global Management (NYSE:APO) could invest up to US$5 billion in the chipmaker.
Conversely, General Motors fell by 1.7% following a downgrade from Bernstein, which shifted its recommendation from ‘outperform’ to ‘market perform’.
European sharemarkets closed higher, with the continent-wide FTSEurofirst 300 index rising 0.4%, as a weak euro zone business activity reading strengthened the case for further monetary policy easing by the European Central Bank (ECB).
The euro zone's composite Purchasing Managers’ Index (PMI) slipped to 48.9 in September, falling below the key 50 mark, which signals contraction. UK markets mirrored this sentiment, with the FTSE 100 also gaining 0.4%.
Currencies and commodities
In commodities, oil prices retreated as weaker business activity in the euro zone stoked concerns about global demand.
Brent crude fell by 0.8% to US$73.90 a barrel, while the US West Texas Intermediate (WTI) crude dropped 0.9% to US$70.37 a barrel.
Gold prices, however, advanced on Monday, rising 0.2% to US$2,652.50 an ounce amid rising geopolitical tensions in the Middle East.
Base metals, including copper and aluminium, saw marginal gains of 0.2%, as China’s central bank injected liquidity into the market, signalling further monetary easing to support economic growth.
In the US, key economic data on home prices, manufacturing, and consumer confidence is due for release, with earnings reports from companies such as AutoZone and KB Home (NYSE:KBH) also expected.
What’s happening in small caps?
You can read about the following and more on Proactive during the day:
- Alto Metals Ltd (ASX:AME) has reported results from metallurgical testwork at the company’s 100% owned Sandstone Gold Project in Western Australia.
- Yandal Resources Ltd (ASX:YRL) received assay results from the Exploration Incentive Scheme (EIS) co-sponsored diamond drilling program across the New England Granite Prospect.
- Great Boulder Resources Ltd (ASX:GBR) announced the acquisition of a group of priority tenements at the company’s flagship Side Well Gold Project near Meekatharra in Western Australia.
- Nexus Minerals Ltd (ASX:NXM) says a 10,000 metre aircore (AC) program has now commenced at the Wallbrook Gold Project, 140 kilometres northeast of Kalgoorlie, WA.
- American Rare Earths Ltd (ASX:ARR, OTCQB:ARRNF) subsidiary Wyoming Rare (USA) Inc has a non-binding Letter of Interest from the Export-Import Bank of the US for a debt-funding package of up to US$456 million for the Cowboy State Mine area at Halleck Creek.