Morning traders. Thanks loungers, especially @Ravgnome and @Patterns.
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
Global X Lithium & Battery Tech ETF: down 2.72%
BHP: down 1.8% (US); down 1.83% (UK)
Rio Tinto: down 1.26% (US); down 1.52% (UK)
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