Afternoon trading Feb 28

Thanks Oscar and morning crew.


Half-time round-up:

Australian shares lost ground for the first time in six sessions after Wall Street sagged under another interest rate scare and Chinese factory data disappointed.

The ASX 200 retreated 28 points or 0.5% to 6028, paring two and a half weeks of steady gains, as the dollar fell below 78 US cents.

Resource stocks took a hit after new US Federal Reserve Chair Jerome Powell raised expectations that US interest rates may rise as much as four times this year. That lit a fire under the greenback, depressing US dollar-denominated commodities. Australian gold stocks shed 2%, metals & mining 0.9% and materials 0.9%. The dollar was buying 77.89 US cents.

"The market has said that on balance Mr Powell's speech and Q&A session is consistent with a central bank warming to the idea of four hikes this year and certainly taking two off the table," IG Markets' Chris Weston told Fairfax. "We can see broad US dollar outperformance, with the US dollar basket up 0.6 per cent. US equities have struggled with the tightening of broad financial conditions."

The S&P 500 fell 1.27%, its largest decline in the three weeks since the start-of-month correction. S&P 500 futures had recently bounced two points or 0.07%.   

Adding to headwinds this morning was a weaker-than-expected Chinese factory update. The official manufacturing purchasing managers' index for this month clocked in at 50.3, versus a January reading of 51.3 and expectations for a similar result. China's Shanghai Composite %, Hong Kong's Hang Seng % and Japan's Nikkei %.

Crude oil futures fell back 36 cents or 0.57% this morning to US$62.65 a barrel. Gold futures rebounded $1 or 0.1% to US$1,319.30 an ounce.



Nice insight from TraderRR this morning in how to trade big 'news' openings, such as PAB today. You can go a long way in this game with a handful of clear ideas about human behaviour. People think you have to understand finance/mining/IT, etc, to make it as a trader. Doesn't do any harm, but the real key to success is psychology. The other half of the equation is recognising your own strengths, weakness and biases to incorporate them into your decision-making. Sort that lot out and you're well on the way.