Outlook for the day: Negative following weak leads from Wall Street and commodity markets ahead of this afternoon's RBA interest rate decision.
ASX futures: down 38 points or 0.53%
Overnight themes:
US stocks retreat after five straight weeks of gains amid questions about market over-exuberance as gold hits a record and Bitcoin surges to its highest in 19 months.
Megacap growth stocks decline as US treasury yields rebound. Microsoft, Amazon and Nvidia all lose at least 1%.
“The sectors that are down today are basically the ones that carried the market for the better part of 11 months” - Tom Hainlin, senior investment strategist at U.S. Bank Asset Management.
Two out of Wall Street's three main benchmarks finished last week at their highest levels of the year (Dow, S&P 500). The Dow's five-week win streak is the longest since 2021. The Nasdaq is up 34% for the year.
Crypto stocks rally as Bitcoin cracks US$41,000 for the first time since April 2022. Coin prices have surged as buyers anticipate US interest rate cuts and US government approval for crypto ETFs.
Industrial and defensive sectors resist the downtrend: real estate, health and consumer staples all gain. Financials is unchanged. Hardest hit are growth and mining stocks. Tech loses 1.31%. Materials sheds 1.19%.
Gold suffers its biggest setback since February as profit-takers take advantage of prices at an all-time high. Gold for February delivery slumped 2.27% to US$2,042.20 an ounce after trading as high as US$2,152.30, an intraday record.
Other commodities also retreat as the US dollar rebounds. The Australian dollar reverses almost 1% to 66.19 US cents.
Copper retreats from a 10-month high. Iron ore, nickel and other base metals decline. Oil falls for a third session as traders bet OPEC+ members won't honour production caps.
The Reserve Bank meets this morning and is widely expected to leave the cash rate target unchanged at 4.35% when it announces its decision at 2.30 pm AEDT.
Key events today:
China services PMI - 12.45 pm AEDT
RBA cash rate announcement - 2.30 pm
US job openings, services PMI - tonight
S&P 500: down 25 points or 0.54%
Dow: down 41 points or 0.11%
Nasdaq: down 120 points or 0.84%
Dollar: down 0.95% to 66.19 US cents
Iron ore (Dalian): down 1.14% to US$135.14
Brent crude: down 85 US cents or 1.08% to US$78.03
Gold: down US$47.50 or 2.27% to US$2,042.20
NYSE Arca Gold Bugs: down 2.57%
Bitcoin: up 4.2% to US$40,641
Copper (LME): down 2.13% to US$8,427
Nickel (LME): down 1.12% to US$16,700
Uranium: down 0.47% to US$81.50
Lithium carbonate (China spot): down 1.54% to US$17,932.80
