Morning traders. Thanks loungers, especially @Ravgnome and @Patterns.
Outlook for the day: Negative after Wall Street falls and a rising US dollar weighs on commodity prices.
ASX futures: down 21 points or 0.29%
Overnight themes:
- US stocks sink ahead of consumer price data tonight as surging oil points to ongoing inflationary pressures and a soft outlook from Oracle weighs on tech stocks.
- Oil closes at a 2023 high after the OPEC+ oil cartel forecasts levels of demand that would create a deficit this year at current constrained production levels, according to commodity analysts. Crude prices have climbed sharply in recent weeks since Saudi Arabia and Russia extended production caps to the end of the year.
- "OPEC's latest analysis shows that if the bloc maintains its August production level of 27.45 million b/d [barrels per day] through the end of the year, the global oil market will be more than 3 million b/d in deficit in the 4th quarter" - Herman Wang, chief OPEC correspondent for S&P Global Commodity Insights.
- Oracle suffers its heaviest single-day loss since 2002, skidding 13.5% after missing sales estimates and forecasting weaker-than-expected revenue.
- Other megacap tech stocks also retreat as the result raises demand questions. Apple, Microsoft, Amazon and Alphabet all retreat.
- “Oracle, which isn’t a super large stock, but it is a look into the spending of businesses — and larger businesses at that — disappointed today, and that’s one of the factors that are suppressing both the NASDAQ and the S&P” - Kim Forrest, founder at Bokeh Capital Partners.
- The Dow is cushioned by gains for Chevron and Goldman Sachs as the energy and financial sectors resist the sell-down. Growth sectors fall hardest.
- Gold falls to a three-week low as the greenback rallies ahead of US inflation data tonight. Nickel is hit particularly hard, falling back under US$20,000 per tonne as base metals retreat.
- A rally in iron ore continues with the Singapore benchmark rising to its highest since late March. Dalian prices touch a five-week high.
Key events today:
- US August consumer inflation report - tonight
S&P 500: down 26 points or 0.57%
Dow: down 18 points or 0.05%
Nasdaq: down 144 points or 1.04%
Dollar: down 0.12% to 64.21 US cents
Iron ore (Dalian): up 1.96% to US$117.76
Brent crude: up US$1.42 or 1.6% to US$92.06
Gold: down US$12.10 or 0.6% to US$1,935.10
NYSE Arca Gold Bugs: up 0.08%
Copper (LME): down 0.11% to US$8,392.50
Nickel (LME): down 3.03% to US$19,865
Lithium carbonate (China spot): down 1.55% to US$26,533
Global X Lithium & Battery Tech ETF: down 0.03%
BHP: down 0.04% (US); up 0.42% (UK)
Rio Tinto: down 0.14% (US); up 0.02% (UK)
