The ASX appears likely to fall on the open this morning following the lead of Wall Street overnight.
The Dow Jones index fell by 405 points or 1% after being down 532 points earlier in the session, while the S&P 500 index also dipped 1% and the Nasdaq lost 1.7%.
This came as investors assessed a slew of US economic data and awaited US Federal Reserve chair Jerome Powell’s message in his testimony before Congress later this week.
Concern about China’s economy was another reason cited for the pullback. While China’s 2024 policy agenda, as detailed on Tuesday, was pro-growth, the decision to target GDP growth at around 5% was “very ambitious,” said Capital Economics’ Julian Evans-Pritchard.
Much of the losses in the US overnight came from the megacaps, particularly tech stocks where falls were largely attributed to profit-taking.
- Apple (NASDAQ:AAPL) slid 2.8% after a research report showed iPhone sales in China fell 24% year-on-year in the first six weeks of 2024 as the US company faced increased competition from domestic rivals such as Huawei.
- Tesla (NASDAQ:TSLA) dipped 3.9% after its European Gigafactory near Berlin halted production after a suspected arson attack.
- Advanced Micro Devices (NASDAQ:AMD) fell 0.1% after Bloomberg said the company failed to get a made-for-China chip past US regulators.
- Microsoft (NASDAQ:MSFT) shed 3% with Intel (NASDAQ:INTC) down 5.4%.
- Albemarle tumbled 17.9% after the lithium producer began the sale of US$1.75 billion of depository shares.
- Target (NYSE:TGT) jumped 12% after the big-ticket retailer forecast annual comparable sales largely above market estimates.
Bitcoin rose as much as 2.5% to set a new high early this morning of US$69,200 (A$106,462) before the cryptocurrency quickly reversed to US$62,182 as the US share market fell away.
European markets
Markets were mixed in Europe on Tuesday. The continent-wide FTSEurofirst 300 index fell by 0.3%. In London, the UK FTSE 100 index rose by 0.1%.
Mining shares weakened with metal prices on a lack of substantial stimulus from top consumer China, while investors awaited this week's European Central Bank (ECB) policy decision. The basic resources sector dropped 0.9% to a four-month low. China-exposed luxury giants including Hermes and LVMH each lost over 1%, with the broader sector slipping to a near two-week low. Technology shares slid 1.6% but utilities stocks rose by 1.9%.
Currencies
Currencies were stronger against the US dollar in European and US trade.
- The Euro rose from US$1.0840 to US$1.0873 and was near US$1.0860 at the US close.
- The Aussie dollar lifted from US64.77 cents to US65.20 cents and was near US65.05 cents at the US close.
- The Japanese yen firmed from 150.60 yen per US dollar to JPY149.72 and was near JPY149.95 at the US close.
Commodities
Global oil prices fell nearly 1% on Tuesday. Weighing on prices, China, the world's biggest oil consumer, set an economic growth target for 2024 of around 5% at a key parliament meeting that missed some investors' expectations for stimulus measures.
- The Brent crude price fell by US76 cents or 0.9% to US$82.04 a barrel.
- The US Nymex crude price dipped US59 cents or 0.7% to US$78.15 a barrel.
Base metal prices slipped on Tuesday as scepticism around China's economic growth countered a weaker US dollar.
- Copper futures fell 0.2%
- Aluminium futures shed 0.4%
On Tuesday, the gold futures price rose by US$15.60 or 0.7% to a record high of US$2,141.90 an ounce.
- Spot gold was trading near US$2,129 an ounce at the US close.
Iron ore futures slid US73 cents or 0.6% to US$116.21 a tonne as investors assessed China's economic targets.
What’s on today?
In Australia, economic (GDP) growth data is released with the national accounts.
- Shares of Accent Group, EQT, Monadelphous, Northern Star Resources (ASX:NST), QBE Insurance, Reliance Worldwide, Servcorp, SmartGroup, Super Retail Group and Treasury Wine Estates all trade ex-dividend.
In the US, ADP (NASDAQ:ADP) employment and JOLTS job openings data are scheduled. The Fed's Beige Book is issued and US Fed Chair Jerome Powell begins semi-annual testimony. Abercrombie & Fitch (NYSE:ANF), Campbell's and Foot Locker (NYSE:FL) all release earnings results.
On the small cap front
The S&P ASX Small Ordinaries gained 0.43% yesterday, while the ASX 200 lost 0.15%.
You can read more about the following throughout the day.
- Astral Resources NL (ASX:AAR) says the latest RC results from the first four holes of a 19-hole drill program have further reinforced the potential scale and grade of the recently discovered Kamperman Prospect at Feysville.
- Artemis Resources Ltd (ASX:ARV, AIM:ARV, OTCQB:ARTTF) has delivered “excellent” assay results from ground reconnaissance sampling at the Mt Marie prospect and identified a new zone at Osborne East, suggesting a greater portion of the tenement area is now prospective for lithium mineralisation.
- Aruma Resources Ltd (ASX:AAJ) reports multiple zones of significant high-grade ionic clay rare earth elements (REEs) from its recently completed first-pass REE-focused drilling program at the Salmon Gums Project in WA.
- Miramar Resources Ltd (ASX:M2R) advises that ground electromagnetic (EM) surveys have identified additional conductors at its Mount Vernon nickel-copper-PGE project in the Gascoyne.
- Brookside Energy Ltd (ASX:BRK, OTC:RDFEF) has completed drilling of the intermediate section of the Iginla Well at the Flames-Maroons Development with casing set and cemented in place.