Outlook for the day: Negative for a fifth session ahead of December jobs figures.
ASX futures: down 20 points or 0.27%
Overnight themes:
US stocks slide as robust retail sales figures dent hopes of interest rate cuts as soon as March. The Dow falls to its lowest in nearly a month.
Treasury yields climb after retail sales increase more than expected in December. Total sales expand by 0.6%, beating economists' predictions of growth of around 0.4%. The report underlines the strength of the US economy at the end of last year, denting the argument for lower rates to support growth. The odds on a rate cut in March fade to 55% from above 60%.
Rate-sensitive real estate stocks and utilities lead the retreat as the yield on 10-year US treasuries climbs above 4.1% for the first time since mid-December.
"People who are positioned aggressively for more rate declines and for higher stocks, are maybe pulling in their horns” - Thomas Martin, senior portfolio manager at Globalt Investments (per CNBC).
All 11 US sectors fall, led by real estate -1.87%, utilities -1.52% and consumer discretionary -0.91%. Defensive sectors suffer least: consumer staples -0.12% and health -0.24%. The materials sector gives up 0.8%. Financials shed 0.28%.
Tesla loses 1.98% after cutting the price of Model Y cars in Germany. The car-maker reduced prices in China last week.
Ratings downgrades weigh on bank stocks following disappointing trading updates over the last week. Morgan Stanley, Bank of America and Citigroup all lose at least 0.9%.
Wall Street's "fear gauge", the VIX or CBOE Volatility Index, rises briefly above its 200-day moving average for the first time since October.
The Russell 2000 index of small caps drops 0.82% to its lowest in a month.
Softening commodity prices help drag the Australian dollar to a six-week low. The Aussie tests 65.25 US cents, a level last seen in the first week of December.
Iron ore falls after steel prices ease for a sixth straight month and the economy expands fractionally less than expected. Dalian ore drops 0.75%.
"It's hard to see a marginal improvement in the fundamentals of ore as steel prices are weak and mills are still suffering losses" - Cheng Peng, analyst at Sinosteel Futures (per Reuters).
Key events today:
December employment report - 11.30 am AEDT. (Expected: employment +15,400; jobless rate unchanged at 3.9%)
US building permits, housing starts, unemployment claims - tonight
S&P 500: down 27 points or 0.56%
Dow: down 94 points or 0.25%
Nasdaq: down 89 points or 0.59%
Dollar: down 0.59% to 65.5 US cents
Iron ore (Dalian): down 0.75% to US$128.67
Brent crude: down 41 US cents or 0.52% to US$77.88
Gold: down US$23.70 or 1.18% to US$2,006.50
NYSE Arca Gold Bugs: down 2.39%
Bitcoin: down 1.86% to US$42,641
Copper (LME): down 0.11% to US$8,345
Nickel (LME): steady at US$16,240
Uranium (spot price): steady at US$108
Lithium carbonate (China spot): down 0.29% to US$13,404
