Morning traders. Thanks loungers, especially @Ravgnome and @Patterns.
Outlook for the day: Negative as a third night of losses in the US offsets a rebound in major commodities.
ASX futures: down 28 points or 0.39%
Overnight themes:
- US stocks fall for a third session as treasury yields test their highest levels in 16 years.
- The rally in bond yields follows upbeat economic data that supports the argument for higher rates to reduce inflationary pressures. First-time claims for unemployment benefits fall by 11,000 to 239,000 last week, indicating a robust labour market. Manufacturing in the greater Philadelphia region rebounds.
- Bond markets also factor in the risk of higher rates after the latest Federal Reserve minutes showed most policymakers anticipate further hikes.
- “I think the likelihood of another hike in September is higher than what the market is currently reading” - John Luke Tyner, portfolio manager at Aptus Capital Advisors.
- The S&P 500's three-session decline of 2.7% is its biggest since March. The Nasdaq is on its worst run since February, down 3.4% in three days.
- Energy is the only sector to resist the sell-off, rising 1.11%. Growth stocks continue to cop the worst of the downturn.
- A rally in iron ore to a three-week high lifts BHP and Rio Tinto in overseas trade. Ore futures rise after China promises more support to encourage consumption and investment. Oil and base metals also rebound.
- Gold logs a ninth straight loss for the first time since 2017. The decline reflects the metal's inverse relationship with US treasury yields. Overnight, the 10-year US yield climbs to its highest since the Great Financial Crisis of 2008.
Key events today:
- No major data releases scheduled here or overseas
S&P 500: down 34 points or 0.77%
Dow: down 291 points or 0.84%
Nasdaq: down 158 points or 1.17%
Dollar: down 0.18% to 64.02 US cents
Iron ore (Dalian): up 4.3% to US$105.15 (3-week high)
Brent crude: up 67 US cents or 0.8% to US$84.12
Gold: down US$13.10 or 0.7% to US$1,915.20
NYSE Arca Gold Bugs: down 0.76% (5-month low)
Copper (LME): up 0.82% to US$8,234
Nickel (LME): up 2.21% to US$20,310
Lithium carbonate (China spot): down 1.52% to US$31,426
Global X Lithium & Battery Tech ETF: down 0.03%
BHP: up 1.1% (US); up 0.91% (UK)
Rio Tinto: up 2.06% (US); up 1.69% (UK)
