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Cleo

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02/10/19

09:26

Post #: 40678109
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Originally posted by highlandlad ↑

Morning traders. Thanks @ttward and lounge lizards.

Overnight round-up and day ahead:

The share market looks set to unwind yesterday's rate-cut rally after dire manufacturing data triggered heavy falls on Wall Street.

ASX SPI200 index futures skidded 75 points or 1.1 per cent to 6650 as US stocks suffered their worst loss in five weeks. The benchmark Australian index, the ASX 200, yesterday surged 52 points or 0.8 per cent after the Reserve Bank lowered the cash rate to a record low 0.75 per cent.

The major US share indices all fell more than 1.1 per cent after the weakest manufacturing figures in ten years sharpened fears that the trade war with China is undermining the US economy. The S&P 500 slid 36 points or 1.23 per cent, the Dow 344 points or 1.28 per cent and the Nasdaq 91 points or 1.13 per cent.

The Dow was ahead more than 100 points early in the session before the Institute of Supply Management released its report. The purchasing managers' index contracted to 47.8 per cent last month, the lowest reading since 2009 and well below the 50 per cent level that divides expansion from contraction. The new exports index shrank to 41 per cent, also a ten-year low.

President Donald Trump blamed Federal Reserve inaction on rates, tweeting: "They don't have a clue. Pathetic!" However, most commentators saw the cause as the tit-for-tat tariff war the White House launched with China. “We have now tariffed our way into a manufacturing recession in the US and globally,” Peter Boockvar, chief investment officer at Bleakley Advisory Group, told CNBC.

Shares of manufacturers and treasury yields declined as traders abandoned stocks for the safety of government bonds and havens such as gold. Broker Charles Schwab dived 9.73 per cent after announcing it will drop all commissions for online share trading in north America.

Gold was one of the night's few winners amid a flurry of "risk-off" buying. Gold for December delivery settled $16.10 or 1.1 per cent higher at $US1,489 an ounce, recouping roughly half of Monday's losses.

Oil retreated amid fears for global demand. Also pressuring crude was news that Ecuador will abandon the OPEC oil cartel as the government seeks to increase revenue. Brent crude settled 36 cents or 0.6 per cent weaker at $US58.89 a barrel.

Copper fell to its lowest price in a month amid weak demand on the London Metal Exchange as China celebrated the 70th anniversary of the founding of the People's Republic. Copper dipped 0.7 per cent, lead 1.9 per cent and zinc 3.9 per cent. Aluminium and nickel rose 1.2 per cent, and tin 2 per cent.

A small gain in iron ore was not enough to shield Australian miners from the chill winds buffeting Wall Street. While BHP's UK -listed stock gained 0.21 per cent, its US-listed stock shed 0.75 per cent. The pattern was similar for Rio Tinto: a modest 0.18 per cent loss in the UK, followed by a heftier 1.38 per cent fall in the US. The spot price for iron ore landed in China improved 70 cents or 0.8 per cent to $US93.90 a ton.

The dollar fell to its lowest level since the GFC following yesterday's rate cut. The Aussie this morning traded two-thirds of a cent lower at 67.03 US cents.

With the week's big domestic economic game-changer out of the way, the local calendar is light today. Chinese markets are closed all week for 70th anniversary celebrations. Wall Street will look to private payrolls data due tonight for a sign that the broader economy is doing better than last night's factory figures suggested. Crude oil inventories are also scheduled.

Breakfast
Today is National Pumpkin Seed Day. Might not scream "breakfast" but apparently it turns up in all sorts of things.

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Pumpkin Seed Oil is to die for. Great on salads. Had to pop into work for a couple of hours this morning but back home again and not leaving my desk during trading hours today (well - just for comfort breaks)

Looking for the next runner ...
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