The ASX is set to open lower this morning after a weak finish to trading on Wednesday.
ASX SPI 200 futures were trading marginally lower to 7,368 as of 8.23am AEDT.
The Dow was also down more than 200 points as investors wrestle with the upbeat earnings versus inflation conundrum.
Here’s what we saw:
- The Aussie dollar fell from highs near US73.05 cents to lows near US72.60 cents and was near session lows in afternoon US trade.
- Global oil prices fell by as much as 3.0% on Wednesday, with the International Energy Agency (IEA) and OPEC warning of the potential for oversupply in coming months.
- The Brent crude price fell by US$2.15 or 2.6% to US$80.28 a barrel.
- The US Nymex crude price fell by US$2.40 or 3.0% to US$78.36 a barrel.
- Base metal prices were mixed. Aluminium rose 1.8%.
- Tin rose 1.1%.
- Other metals fell as much as 2.9% with lead down the most.
- The gold futures price rose by US$16.10 or 0.9% to US$1,870.20 an ounce.
- Spot gold was trading near US$1,866 an ounce at the US close.
- Iron ore fell by US45 cents or 0.5% to US$89.95 a tonne.
Australian markets
According to leading data and analytics company GlobalData, deal activity including mergers & acquisitions (M&A), private equity (PE) and venture capital (VC) financing deals across the Asia-Pacific (APAC) region reported a 4.3% decline in October 2021.
The drop is primarily due to a nosedive in PE/VC deals and decline in the overall deal volume across big markets China and India,
A total of 1,278 deals were announced in the APAC region during October 2021 compared with 1,336 deals during the previous month.
Notably, the deal volume during the month was lesser than the monthly average of Q3 2021 but higher when compared to the monthly average of Q1 and Q2.
“Deal activity in the APAC region has been consistently improving since June. However, October reversed the trend with surge in new COVID-19 cases across key markets such as China impacting the deal-making sentiments,” GlobalData lead analyst Aurojyoti Bose said.
New Zealand (23.8%), Japan (23.1%), Malaysia (16.7%) and South Korea (4%) led the way in month-on-month growth in deal volume in October 2021.
However, big markets such as China (-5.8%) and India (-11.6%) reported month-on-month decline. Singapore, Indonesia and Australia also saw month-on-month decline in deal volume.
Key deal types such as private equity and venture financing deals witnessed 33.8% and 6.7% decline in deal volume in October 2021 compared to the previous month, respectively while the number of M&A deals increased by 3.9%.
“Deal activity in the region remained inconsistent ever since the COVID-19 pandemic started playing havoc with markets. Although some countries are showing improvement in deal-making sentiments, market conditions still remain volatile in some of the key markets such as China and India,” Bose concluded.
Bitcoin miner slumps
Sustainable Bitcoin miner launched on the NASDAQ last night, however, the Sydney-based company slumped in trading.
The stock closed down 12.7% at $24.45.
The $US28 per share IPO price was well above expectations for $US25 to $US27 per share, so the dip is unsurprising.
Iris Energy owns data centres, powered by renewable energy, which it uses to mine bitcoins it then converts into cash.
TWE makes another acquisition
Treasury Wine Estates Ltd continues to expand its footprint in the US, this time agreeing to acquire Frank Family Vineyards in the US for $US315 million (AU$434 million) in a deal that is expected to be completed by next month.
The company says the acquisition will give it a leg up in its portfolio for luxury chardonnay in its US business, Treasury America.
Frank Family Vineyards founders Rich and Leslie Frank will remain involved in the Treasury Americas business.
Retail price points range from $US38 to $US225 per bottle across three collections, which seems a nice little earner for TWE.
Australian indices
- ASX 200 fell 0.68% to 7,369.90.
- ASX24 futures were flat at 7,368.
- S&P/ASX Small Ordinaries rose 0.31% to 3,564.10.
- All Ordinaries was down 0.56% to 7,704.00.
US markets
US markets were down yesterday, led by a 4.7% fall in shares in retailer Target. While Target’s profit beat expectations, third-quarter margins fell due to supply chain issues. Shares in Visa (NYSE:V) fell 4.2% after Amazon said it would stop accepting credit cards issued by the firm in the UK in 2022 due to higher fees.
Countering that was Lowe’s, which rose 2.2% after the home improvement retailer raised its full-year sales forecast.
Nvidia Corp. was the one to watch, regaining its losses after the chip maker topped expectations across the board, projecting more than $7 billion in holiday-quarter revenue.
Nvidia reported third-quarter net income of $2.46 billion, or 97 cents a share, compared with $1.34 billion, or 53 cents a share, over the year. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $1.17 a share, compared with 73 cents a share.
Revenue surged to a record $7.1 billion, up 50% from $4.73 billion in the corresponding quarter. Analysts estimated adjusted earnings of $1.11 a share on revenue of $6.82 billion, while company executives forecast revenue between $6.66 billion to $6.94 billion in August.
Shares rose nearly 4% after hours, following a 3.1% decline in the regular session to close at $292.61.
Biden wants regulatory checks on fuel prices
"I do not accept hard-working Americans paying more for gas because of anti-competitive or otherwise potentially illegal conduct," Biden wrote in a letter to US regulators, who he called on to look into the causes of the nationwide spike in fuel prices.
Biden’s letter sent to the Federal Trade Commission (FTC) took aim at oil companies that he claims are raising prices at the pump even as their expenses decline and profits soar.
Biden wants the body to look into potential 'illegal conduct' that may be behind the energy price spike, which he believes is unjustified.
US indices
- Dow Jones was down 0.6% to 35.931.05.
- S&P 500 fell 0.3% to 4,688.67.
- Nasdaq fell 0.3% to 15,921.57.
European markets
Things were mixed in Europe yesterday.
Reuters noted that "German medical tech firm Siemens Healthineers gained 5.6% after raising synergy targets from its Varian acquisition earlier this year."
Meanwhile, shares in Swiss luxury firm Richemont rose for a fifth day, up 0.6% to an all-time high, on broker upgrades.
Eurozone inflation rose 4.1% in the year to October, more than twice the central bank's target. The pan-European STOXX 600 index and the German Dax index rose to record highs.
In London trade shares in Rio Tinto fell by less than 0.1% and BHP fell by 0.5%.
Here’s a quirky take on what’s going on in Europe by Joseph Palmer & Sons director Alex Moffat …
“Way back in 1996 the then chairman of the US Federal Reserve, Allan Greenspan, gave a speech in which he used the term 'irrational exuberance', thus setting off a wave of market volatility. He said, in part, ‘But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? And how do we factor that assessment into monetary policy?’
“Greenspan does not own the term which was partially wheeled out again overnight by the head of the European Central Bank who warned of ‘exuberance’ in housing, junk bonds and crypto assets, going on to point out, helpfully, that ‘investors taking risks in search of yield has left markets susceptible to correction’. Well spotted Mme Lagarde!
“Not so much a correction, rather more of a rout is occurring in several currencies most notably the Turkish Lira, the Pakistani Rupee and the Iranian Rial all of which have set new record lows against the US Dollar. The situation for the Turkish Lira is being exacerbated by expectations the central bank will cut its base rate by 100 basis points to 15%. Turkey has been struggling with inflation and the President believes that cutting rates will ease inflationary pressures. Turkish central bankers who have disagreed with him have found themselves out of a job.”
European indices
- STOXX 600 rose 0.14% to 489.95.
- German Dax was flat at 16,251.13.
- UK FTSE fell 0.5% to 7,291.20.