Day trading pre-market open August 6

Morning traders. Thanks loungers, especially @Ravgnome and @Patterns.


Outlook for the day: Negative ahead of an RBA rates announcement this afternoon. ASX futures point to more down-pressure following a third night of heavy selling in the US as a global market rout continued. However, the futures decline here is notably mild relative to overnight selling on Wall Street and in much of Asia yesterday.

ASX futures: down 27 points or 0.36%


Overnight themes:

• The Dow and S&P 500 suffered their heaviest falls in almost two years as a global market rout continued for a third session in the US.
• The Dow gave up more than a thousand points or 2.6% as all 30 component companies declined. Tech giants Intel and Apple led the retreat. The fall was the Average's worst since September 2022.
• The S&P 500 shed 3%, also its biggest loss since September 2022. No sector was spared. Declines ranged from 1.72% for industrials up to 3.78% for tech.
• The Nasdaq lost another 3.43% a day after entering a technical correction. Apple dropped 4.82% after Warren Buffett's Berkshire Hathaway sold half its stake. Nvidia's fall from its peak neared 29% with an overnight loss of 6.36%. Japan's Nikkei 225 index tumbled 12.4% yesterday during its worst session since 1987.
• Market observers pointed to two triggers for the carnage over the last few sessions: fear that a recent run of soft US economic data indicates a US recession is increasingly likely; and the end of the so-called "carry trade" out of Japan after the Bank of Japan raised rates.
• "I think people were basically lulled into a sense of security, yet the market itself was very vulnerable to a correction — and the weaker than expected economic and employment data provided that catalyst for correction” - Sam Stovall, chief investment strategist at CFRA Research (per CNBC).
• US stocks pared losses overnight after a measure of services sector activity rebounded last month from a four-year low. The Institute of Supply Management's services PMI climbed to 51.4 from 48.8 in June. Readings above 50 indicate expanding activity.
• Treasury yields continued to slide as investors bought havens, including government bonds. (Bond prices move inversely to yields.)
• Wall Street's "fear gauge", the VIX or volatility index, touched its highest level since the pandemic in 2020 before paring its rise.
• Commodity prices joined the retreat. Copper fell to its lowest in four and a half months. Brent crude touched its weakest level since the opening sessions of the year. US gold miners were knocked down 3.5% as the yellow metal lost a little more than 1%. Silver gave up more than 4%. Gas and agricultural markets also took a hit. Wheat lost more than 3%.
• "These markets are all linked. Metals and energy markets are sensitive to macro themes... Equity investors effectively link some of their portfolio to commodity markets either directly or through indices" - Liberum analyst Tom Price (per Reuters).
• Iron ore offered a flicker of green in the turmoil, rising almost 2% in China as a pick-up in services activity last month soothed worries that the economy was faltering. Caixin's gauge of China services sector activity expanded for a 19th straight month. Steel and steel-making ingredients also improved.

Key events today:

• July job ads - 11.30 am AEST
• RBA interest rate announcement - 2.30 pm AEST

S&P 500: down 160 points or 3%

Dow: down 1,034 points or 2.6%

Nasdaq: down 576 points or 3.43%

Dollar: down 0.05% to 64.94 US cents

Iron ore (Dalian): up 1.97% to US$108.69

Brent crude: down 51 US cents or 0.67% to US$76.30

Gold: down US$25.40 or 1.03% to US$2,444.40

Silver: down US$1.18 or 4.16% to US$27.21

NYSE Arca Gold Bugs: down 3.48%

Bitcoin: down 6.68% to US$54,754

Copper (LME): down 2.22% to US$8,854.50

Nickel (LME): down 0.89% to US$16,205

Lithium carbonate (China futures): up 0.36% to US$11,190

Global X Lithium & Battery Tech ETF: down 2.74%

Uranium (spot): down 0.3% to US$82.50

BHP: down 1.8% (US); down 1.71% (UK)

Rio Tinto: down 1.1% (US); down 0.26% (UK)