The local market is set to open lower this morning — the ASX 200 futures are down 0.2% to 8,310 points — following falls in the US overnight.
US stocks declined ahead of the Federal Reserve’s last interest rate announcement of the year tonight, with the Dow Jones losing 0.6% to fall for a ninth consecutive session — its longest losing streak since 1978. The S&P 500 index closed 0.4% lower and the tech-focused Nasdaq index fell 0.3%.
The retreat came despite stronger-than-expected US retail sales data for November, driven by increased motor vehicle purchases, which highlighted solid consumer spending and resilience in the economy.
Investors remained cautious ahead of the Federal Reserve’s final policy announcement of the year.
A 25-basis-point interest rate cut is anticipated but investors are focused on the Fed’s summary of economic projections, which could provide insight into the central bank’s approach to rate cuts in 2025.
Analysts suggest the Fed may adopt a cautious stance on easing given the economy’s solid momentum, sticky inflation, and anticipated growth-stimulating policies under the incoming Trump administration.
“This is just kind of standard fare for a pre-Fed day market,” said Albion Financial Group CEO Jason Ware, noting investor uncertainty surrounding the projections and Fed Chair Jerome Powell’s upcoming remarks.
European markets
European markets closed lower on Tuesday, with almost all sectors in negative territory as well as most major European bourses.
- The continent-wide FTSEurofirst 300 index dipped 0.4%.
- In London, the UK FTSE 100 index slid 0.8%
The oil and gas index dropped 1.3% to its lowest level in 17 months as crude prices slid after economic data from China renewed demand concerns.
European banks were another drag, down 1.5% with Spanish lenders such as Santander and Sabadell at the forefront of losses. The broader Spanish benchmark dropped 1.6%.
Germany's Ifo Institute said its business climate index decreased to 84.7 in December from 85.6 in November (survey: 85.5).
Currencies
Currencies were mixed against the US dollar in European and US trade.
- The Euro rose from US$1.0479 to US$1.0514 and was near US$1.0485 at the US close.
- The Aussie dollar dipped from US63.55 cents to US63.31 cents and was near US63.35 cents at the US close.
- The Japanese yen rose from 154.23 yen per US dollar to JPY153.22 and was near JPY153.50 at the US close.
Commodities
Global oil prices slid 1% to a one-week low on Tuesday on demand worries following the release of negative economic news from Germany and China, while investors remained cautious ahead of a US Federal Reserve decision on interest rates.
- The Brent crude price fell US72 cents or 1% to US$73.19 a barrel.
- The US Nymex crude price dipped US63 cents or 0.9% to US$70.08 a barrel.
Base metal prices retreated on Tuesday.
- Copper futures slid 1.3% with sentiment dominated by a stronger US dollar and worries about demand in top consumer China.
- Aluminium futures shed 1%.
The gold futures price fell by US$8.00 or 0.3% to US$2,662 an ounce on Tuesday, under pressure from a stronger US dollar as investors focused on the US central bank's final policy meeting of the year with growing expectations of a gradual pace of rate cuts in 2025.
Spot gold was trading near US$2,643 an ounce at the US close.
Iron ore futures rose by US17 cents or 0.2% to US$105.58 a tonne on Tuesday, as markets weighed slowed shipments against lacklustre demand and high portside stocks in top consumer China.
What’s happening in small caps?
- Maximus Resources Ltd (ASX:MXR, OTC:MXRRF) assay results show shallow high-grade gold mineralisation, of up to 56.5 g/t gold, continues in the northern zone of the 8500N Paleochannel near Kambalda, Western Australia.
- Altech Batteries Ltd (ASX:ATC, OTC:ALTHF) has executed a third offtake heads of agreement with Axsol GmbH — a certified supplier to NATO and select western allied forces — to supply the western defence industry with CERENERGY® battery technology.
- Olympio Metals Ltd (ASX:OLY, OTC:COPGF) has scheduled a Fixed Loop EM ground survey to cover the Chevrier high-grade copper prospect, which makes up part of the Dufay Project in Quebec.
- Sprintex Ltd (ASX:SIX) has entered into a binding underwriting agreement with China Automotive Holdings Ltd, allowing the company to receive funding from the exercise of options priced at 7.5 cents expiring December 31, 2024.
- Tryptamine Therapeutics Ltd (ASX:TYP, OTC:TYPTF) has provided positive Interim analysis as part of its Phase 2a Clinical Study in patients with Irritable Bowel Syndrome.