Morning traders. Thanks loungers, especially @Ravgnome and @Patterns.
Outlook for the day: Mildly negative after US stocks gave up early gains following a mixed bag of corporate earnings.
ASX futures: down 18 points or 0.22%
Overnight themes:
- US stocks surrendered morning gains following a downbeat outlook from two chip stock manufacturers and as a jump in private job gains clouded the outlook for interest rate cuts.
- The Nasdaq hit an all-time high before fading to a loss of 0.56%. The S&P 500 declined 0.33%. The Dow dropped 0.22% to its seventh loss in the last eight sessions.
- A strong trading update from Google parent company Alphabet was largely overshadowed by negative news from the high-flying chip sector. Alphabet shares firmed 2.82% as strength in its cloud business helped it beat Q3 revenue expectations. In the chip space, AMD slumped 10.62% after disappointing investors with its forward revenue guidance. Qorvo, which makes chips for Apple, tumbled 27.31%, also on weak guidance. Super Micro Computer lost almost a third of its market value after Ernst & Young quit as auditor.
- “Qorvo, Advanced Micro and Super Micro - those are three pretty big moves that are causing a little bit of angst and taking some of the bloom off the rose from the stellar print from Google last night” - Michael James, managing director of equity trading at Wedbush Securities (per Reuters).
- Treasury yields rallied after a report showed private payrolls increased by 233,000 this month - almost twice as much as economists forecast. September job gains were also revised higher. The full Labor Department October jobs report is released tomorrow night.
- A separate report showed the US economy remained on solid ground as consumer spending picked up. Gross domestic product increased at an annual rate of 2.8% last quarter, according to the Commerce Department. Consumer spending expanded by 3.7%, the fastest rate since the first quarter of 2023.
- The tech sector was the heaviest drag on the market, falling 1.34%. Consumer staples, utilities, health and industrials also declined, all by less than 0.3%. Communication services was the pick of the sectors, adding 0.99%, thanks to Alphabet. Next best were financials +0.42%, real estate +0.39% and materials +0.37%.
- Microsoft and Meta Platforms suffered mixed fortunes after reporting following the close of regular trade this morning. Microsoft rallied 0.9% in after-market trade. Meta dropped 0.39%.
- Gold futures settled above US$2,800 an ounce for the first time ever as polling indicated next Tuesday's US presidential election will go down to the wire. Gold prices have lifted by more than a third this year. Overnight, the most traded futures contract climbed US$19.70 or 0.7% to US$2,800.80 an ounce.
- "We have elections coming up, the political climate here is just very uncertain, the Fed is cutting interest rates, prospects of Russia, Ukraine... There's just so much out there to push gold higher, and all the negative news out there is what gold is really looking for. The next step higher is probably $2,850" - Daniel Pavilonis, senior market strategist at RJO Futures (per Reuters).
- Oil rebounded from a seven-week low after the US national stockpile unexpectedly contracted and reports emerged that the OPEC+ cartel might delay a production increase scheduled for December. A Reuters report said the cartel was debating holding off on a plan to start unwinding voluntary production cuts in December. Brent crude bounced 2% to US$72.55 a barrel.
- Iron ore fell after the European Union announced sharp tariff increases on Chinese electric vehicles following a trade investigation. Benchmark ore on the Dalian Commodity Exchange sagged 0.7% to US$108.88 a metric ton.
Key events today:
- Retail sales - 11.30 am AEDT
- Building approvals - 11.30 am
- Private-sector credit - 11.30 am
- China manufacturing and non-manufacturing PMIs - 12.30 pm
- US inflation data (PCE) - tonight
- US unemployment claims - tonight
S&P 500: down 19 points or 0.33%
Dow: down 92 points or 0.22%
Nasdaq: down 105 points or 0.56%
Dollar: up 0.25% to 65.74 US cents
Iron ore (Dalian): down 0.7% to US$108.88
Brent crude: up US$1.43 or 2% to US$72.55
Gold (futures): up US$19.70 or 0.7% to US$2,800.80
Gold (spot): up US$10.24 or 0.37% to US$2,785.25
Silver (spot): down 74 US cents or 2.16% to US$33.73
NYSE Arca Gold Bugs: down 1.24%
Bitcoin: up 0.23% to US$72,245
Copper (LME): up 0.3% to US$9,559
Nickel (LME): down 0.6% to US$15,810
Lithium carbonate (China): down 0.27% to 73,850 yuan
Global X Lithium & Battery Tech ETF: down 0.94%
Uranium (spot): down 0.31% to US$80.75
Global X Uranium ETF (URA): down 1.63%
BHP: down 1.26% (US); down 1.31% (UK)
Rio Tinto: down 1.01% (US); down 1.52% (UK)
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