It looks like the ASX will give up yesterday’s gains after a late sell-off on Wall Street in the early hours of this morning.
The benchmark ASX 200 is piqued to open 8 points or 0.11% lower after seesawing in line with the New York markets.
What’s happening on Wall Street?
US stocks pumped the breaks on Monday after Federal Reserve governor Christopher Waller said there was “a way to go” before the central banking system paused interest rate hikes
Securities rallied at the weekend thanks to better-than-expected inflation data, indicating there might be some rate hike relief in sight, but Waller says the Reserve will wait and see how softer inflation pressures impact the market before making its next move.
“The worst thing you can do is stop [tightening conditions] and then it takes off again and you’re caught,” he told pundits at the UBS Australasia conference in Sydney on Monday.
"We're at a point we can start thinking maybe of going to a slower pace … [but] we’re not softening.”
Waller’s comments toned down investor sentiment and the Nasdaq reversed yesterday’s fortunes and led the decline with a 1.16% fall, while the S&P 500 and the Dow fell 0.89% and 0.63%, respectively.
Among the sectors, Healthcare was the only one in the green with a 0.03% gain. Vaccine giant Moderna propped up the win with news its new COVID booster triggers five times more antibodies against an omicron subvariant.
Overall, just 43% of US listers advanced, while Real Estate stocks fared the worst with a 2.65% loss.
Consumer discretionary stocks also slumped on news eCommerce Amazon is planning to cut 10,000 jobs, marking the largest layoffs in the company’s history.
Commodities and currency
Oil is back in the red after the latest report from OPEC revised down global oil demand and curbed production forecasts in its monthly paper.
West Texas Intermediate (WTI) dipped just under 4% on the news, while Brent Crude lost 4.42% to trade just above US$85 a barrel.
Meanwhile, gold recorded slight gains, up 0.34%, and iron ore futures jumped 1.2% to US$92.65 a tonne.
The Aussie dollar held its ground overnight — it’s currently buying 67 US cents and 57 British pence.
On the ASX
Earnings season continues today, with news from Australia’s largest bank and a commercial maltster among the reports on the ASX’s desk.
Big Four player Commonwealth Bank of Australia (ASX:CBA) grew its cash profit by 2.5% to $2.5 billion and reported softening bad debts this morning — a trend seen across the major financial players despite rising interest rates.
Commenting on the September quarter performance, CBA CEO Matt Comyn said the bank remained optimistic on the medium- to long-term outlook despite near-term challenges, such as rising expenses (up 4.5% on the last quarter).
United Malt Group also published its financials and guidance today, tabling a near-14% increase in revenue amid higher barley prices.
The maltster expects further upside in FY23, targeting a $140 million to $160 million earnings band for the full financial year.
In other news, ASX-lister Strike Energy is fighting for Warrego Energy’s attention after a competing cash proposal from Beach Energy came in late last week.
Strike hopes to execute its energy and fertiliser development strategy in WA’s Perth Basin and it believes its current offer represents “a superior result for Warrego shareholders”.