The ASX has opened higher this morning even though its counterparts in the US were flat overnight.
ASX futures were up 22 points, or 0.3%, to 6,707 early this morning. The dollar was also up 0.4% to 69.56 US cents.
On Wall Street the Dow was flat, the S&P 500 lost 0.1% and the Nasdaq lost 0.7%.
Big tech was mostly on the slide, with Apple, Amazon and Tesla all down, but the big miners added value – BHP was up 2.9% and Rio Tinto was up 3.4%.
Wall Street investors are waiting on two key indicators to assess their horizons.
Firstly, big tech companies – Apple, Amazon, Meta, Microsoft – will post their results later this week, along with consumer-facing brands like Coca-Cola and McDonald’s, which will give the market some clues about inflation.
Secondly, the Fed is due to deliver another expected rate rise, following a June hike that was the biggest since 1994. Expectations are that the needle will move by another 75 basis points.
If Walmart’s profit outlook is any indication, US inflation is peaking and a recession might be the next thing to worry about. The consumer heavyweight lowered its profit outlook, citing the impact of food inflation on consumer spending.
"The increasing levels of food and fuel inflation are affecting how customers spend," Walmart CEO Doug McMillon said in a news release on Monday. "Apparel in Walmart US is requiring more markdown dollars."
Dark times in Europe
There isn’t much joy across the Atlantic, either. German business confidence fell to the lowest level since before the pandemic, said the Ifo business sentiment survey.
The country is facing an energy supply shortage that may mean winter rationing for businesses and consumers, with a Russian-backed gas company issuing a statement that flows through the Nord Stream 1 Pipeline would fall to 33 million cubic metres per day. This is a significant reduction on the current 60 million cubic metres per day.
On the back of this news, gas prices in Europe jumped by more than 10%.
Oil is also up, as supply chain issues from Russia and Libya continued to plague the market.
Bitcoin and gold were both softer overnight, as were base metal prices.
Climate on the agenda
Parliament is back in session and it’s going to be a busy one. The new government is bringing some 18 pieces of legislation to the table, including domestic and family violence leave and voluntary assisted dying bills. The bill garnering the most attention, however, is the government’s climate target – 43% by 2030 – which it is seeking to seal into law.
Legislating the climate target will provide industry with certainty over that time, allowing businesses to get on board and start planning.
The Business Council of Australia said in a recent statement:
“We need to be a magnet for global investment by making ourselves the best place to do business to attract the capital needed to transform our economy.
“With all our advantages, we can be at the cutting edge of the new mining revolution, leaders when it comes to advance manufacturing and a truly digital nation.
“We should be at the front of the new global energy supply chains, exporting our renewable energy and clean manufactured products.
“These things are achievable but only with a clear national focus on scaling up, commercialising new technology and making the most of our people and industries.”
This ‘national focus’ will need to be trained on getting a consensus on climate in the first instance.
"We actually need to have a plan to get change. You can't just come up with a figure or come up with a sort of thought bubble," Prime Minister Anthony Albanese said.
There are hopes that establishing the target will end the so-called climate wars, but the bill could still be torpedoed in the Senate by the Greens.
Greens leader Adam Bandt, who says his concern is that the 43% target should be a floor, not a ceiling, is still in negotiations with the government.
It remains to be seen whether the Greens will let the first piece of positive climate legislation in more than a decade pass through both chambers of Parliament.