Morning traders. Thanks loungers, especially @Ravgnome (great to have you back) and @Patterns.
Outlook for the day: Negative following a sharp afternoon sell-off on Wall Street.
ASX futures: down 80 points or 1.06%
Overnight themes:
- US stocks swoon in the final two hours of trade, ending a run of record finishes for the Dow Jones Industrial Average. Market commentators struggle to explain the sudden reversal, but stocks had been trading in "overbought" territory, inviting traders to take some profits.
- The Dow's win streak ends at nine and its run of record finishes at five. The S&P 500 falls narrowly short of its old high, set in January 2022. All three major indices end at session lows.
- “Frankly, it’s healthy for continued upside to have days where we have at least a modest pullback... Markets were becoming overbought, and a pullback like this is natural” - Keith Buchanan, senior portfolio manager at Globalt Investments (per CNBC).
- The major indices start the session under mild pressure following a weak revenue outlook from economic bellwether stock FedEx. The delivery giant tanks 12.06% after cutting its full-year forecast and missing quarterly profit expectations. The major stock indices turn positive in late-morning trade before falling sharply after 2pm NYC time.
- AmEx, Disney and 3M are the biggest drags on the Dow. Warner Bros, Tesla and Nvidia weigh on the Nasdaq.
- “Valuations are once again a bit stretched, so the market is taking a bit of a breather”- Eric Sterner, chief investment officer at Apollon Wealth Management (per MarketWatch).
- Earlier, data shows optimism among Americans is the strongest in five months. The Conference Board's consumer confidence index rises to a five-month high of 110 points this month from 101 in November.
- Housing data is also positive. Sales of existing homes increase 0.8% last month, breaking a run of five straight declines.
- The sell-off sinks every sector. Consumer stocks and utilities are hit hardest. Consumer staples drops 2.02%, utilities 1.98% and consumer discretionary 1.74%. The financial sector sheds 1.72%, tech 1.54% and materials 1.48%.
- Iron ore rebounds amid reports of steel mills restocking ahead of the Chinese lunar New Year break in February. Market interest was boosted by news that developer Longfor Group repaid a creditor ahead of time. China-traded ore gains 1.46%.
- Uranium hits a new 16-year high, supported by Chinese plans to build 154 new nuclear reactors. The spot price trades above US$90 a pound.
- Supply disruptions lift Brent crude briefly back above US$80 a barrel. The international benchmark settles at a three-week high despite a late partial retreat. Prices have rebounded as Houthi rebel attacks on Red Sea shipping force transport companies to re-route cargoes.
Key events today:
- US final GDP - tonight
S&P 500: down 70 points or 1.47%
Dow: down 476 points or 1.27%
Nasdaq: down 225 points or 1.5%
Dollar: down 0.39% to 67.29 US cents
Iron ore (Dalian): up 1.46% to US$131.58
Brent crude: up 47 US cents or 0.59% to US$79.70
Gold: down US$4.40 or 0.21% to US$2,047.70
NYSE Arca Gold Bugs: down 1.8%
Bitcoin: up 2.81% to US$43,635
Copper (LME): up 0.03% to US$8,596
Nickel (LME): up 0.72% to US$16,775
Uranium: up 4.01% to US$91
Lithium carbonate (China spot): down 0.98% to US$14,160
Global X Lithium & Battery Tech ETF: down 2.81%
BHP: down 1.77% (US); down 0.19% (UK)
Rio Tinto: down 1.79% (US); down 0.05% (UK)
Day trading pre-market open December 21
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