Wall Street’s losing week carried all the way through to Friday and will impact the Australian Stock Exchange’s start to the week.
The ASX is expected to open flat this morning.
ASX SPI 200 futures were little changed at 7,351 as of 8.03am AEDT.
Here’s what we saw:
- The Aussie dollar rose from US71.30 cents to US71.87 cents and was near US71.80 cents at the US close.
- Global oil prices fell by up to 0.7% on Friday affected by softer US jobs data, soaring Omicron cases, oil production outages in Libya and unrest in Kazakhstan.
- The Brent crude price fell by US24 cents or 0.3% to US$81.75 a barrel.
- The US Nymex crude price fell by US56 cents or 0.7% to US$78.90 a barrel. Over the week Brent crude rose by US$3.97 or 5.1%. Nymex crude rose by US$3.69 or 4.9%.
- Base metal prices were mixed to finish the week.
- Lead, zinc and aluminium fell by as much as 1.5% while other metals rose by up to 1.8%. Over the week, tin and aluminium rose by up to 3.5%.
- The gold futures price rose by US$8.20 or 0.5% on Friday to US$1,797.40 an ounce.
- Spot gold was trading near US$1,796 an ounce at the US close.
- Over the week gold fell by US$31.20 an ounce or 1.7%.
- Iron ore fell by US95 cents on Friday or 0.7% to US$127.30 a tonne. Over the week, iron ore rose by US$8.30 or 7%.
Australian market
The ASX has shown its resilience in the face of a US market sell-off, but is set to open the week flat.
Wall St was affected by news that the US Federal Reserve will begin lifting rates as soon as March, however, this won’t affect the ASX too much.
Perpetual Head of Investment Matt Sherwood puts the resilience down to index composition.
“We’re also outperforming because our market is not as overvalued, the RBA is making noises about being on hold, and Omicron in Australia, while big, the population is largely vaccinated compared to the US where there may be some more economic downside,” Sherwood said.
Novonix to dual list
Novonix Ltd (ASX:NVX) will dual list on the NASDAQ.
The battery technology company has now started the process to dual list its securities on the Nasdaq Stock Market, with the US Securities and Exchange Commission (SEC) and Nasdaq to complete their review process.
Securities listed in the US will take the form of a Level II American Depository Receipt (ADR) program. An ADR is a negotiable receipt, resembling a stock certificate that is issued by a United States depositary bank appointed to evidence one or more American Depositary Shares.
The primary listing will remain the ASX.
“We believe Novonix was the first qualified supplier of high-capacity long-life synthetic graphite anode material to a major cell maker and is the only supplier with plans to provide large volumes of this key material in the US,” Novonix chief executive Chris Burns said.
“Our technological breakthroughs are helping to power the energy storage market, leading to better performance, longer life and lower costs.
“This listing furthers our long-term goal of reshoring the EV supply chain in North America and becoming a leader in the electrification economy.”
US markets
Worrisome jobs data led US markets down on Friday.
The December jobs report showed the US economy added just 199,000 positions last month, well below estimates, yet offset by a bigger-than-expected drop in the unemployment rate to 3.9%.
Wage growth has also been strong in a tight labor market.
All three major indices fell, with the S&P 500 ending at 4,677.03, down 0.4% for the day and 1.9% for the week.
The Dow Jones Industrial Average ended flat at 36,231.66, while the tech-rich Nasdaq Composite Index dropped 1% to 14,935.90.
All in all, it was a red week for US stocks as jobs data and interest rates made their mark on investor confidence.
“The central bank is clearly shifting its focus to inflation and today’s report provides more ammunition to those who want not just to accelerate the tapering, but also start raising rates and reducing the Fed’s balance sheet,” economist Joel Naroff said.
“Yes, interest costs will rise, but the current rates are so low that the increases should not have a major impact on overall economic growth.”
Other news
Reuters has reported that Reddit Inc is tapping Wall Street banks Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) Group for its initial public offering. The social media outfit which began the meme stock craze last year, looks like it wants to become the thing its users hate.
The stock Reddit helped rise dramatically before a spectacular fall, GameStop rallied on Friday after a report that the videogame retailer wants to expand its non-fungible tokens (NFTs) marketplace and partner with crypto firms.
Apple boss Tim Cook earned US$100 million last year, 1447 times that of the average Apple employee.
European markets
European shares were also down on Friday amid concerns over rising inflation and surging coronavirus infections.
The pan-European STOXX 600 closed 0.4% lower on Friday and 0.3% on the week.
Markets were dragged down by European travel and leisure stocks which slipped 1.6% and was among the worst performers for the day. It is unsurprising as the world grapples with what to do with travel in the wake of rising Omicron cases.
Eurozone inflation rose to a record high last month, putting pressure on the European Central Bank to raise interest rates in 2022.
Of the better performers, Italy’s STMicroelectronics (NYSE:STM) was 3% higher after posting quarterly revenue above its own estimates.
German chipmaker Infineon Technologies gained 1.7%, taking cues from South Korea’s Samsung Electronics (KRX:005930) that posted upbeat fourth-quarter results.
Deutsche Bank was 1.8 higher – a six-month high – on the back of confidence it has in reaching a key profitability target this year.
The pan-European STOXX 600 index fell 0.4%. The German Dax index lost 0.7%. But the UK FTSE index rose by 0.5%.
In London trade, shares in Rio Tinto rose 2.6% and shares in BHP rose by 2.7%