Australian stocks are expected to rise on Wednesday morning, after a mixed day on Wall Street with the fall in stocks and technology data.
Key points:
- The ASX 200 is expected to open slightly on Wednesday
- Wall Street was mixed, with the only major index ending higher
- Iron ore fell $ 1.19 or 0.9 percent to $ 133.10.
Futures ASX SPI 200 rose slightly, to 7,126, at 6:35 am EAST.
The Australian dollar remained stable at 71.05 US cents
The S&P 500 and Nasdaq ended in the red on Tuesday, as concerns that aggressive moves to curb decades-high inflation could plunge the U.S. economy into a recession reduced investors’ risk appetite.
The high-tech Nasdaq fell 2.4% to 11,264. The S&P 500 was down 0.8% to 3,941, and the Dow was up 0.2% to 31,928.
“As we take a step back and recognize the primary market catalysts, it’s really the pivot of the Fed and the change in interest rates, which have influenced capital market prices,” said Bill Northey. senior director of investment at US Bank Wealth Management.
“In the last two weeks, we have seen a certain degree of macroeconomic deterioration that is beginning to manifest itself in business gains and economic launches.”
Much of the sale was driven by a profit warning from social media company Snap that plunged the company’s shares and caused a contagion across the social media segment.
Meta Platforms, Alphabet, Twitter, and Pinterest ended the session lower, as did the broader S&P 500 communications services industry.
World supply chain disruptions have been exacerbated by Russia’s war with Ukraine and restrictive measures in China to control its latest outbreak of COVID-19, sending inflation to record highs of several decades.
The U.S. Federal Reserve has pledged to aggressively address persistent price growth by raising the cost of borrowing, and market participants will discuss the minutes of its latest monetary policy meeting, scheduled for Wednesday, to find clues on the speed and scope of these actions.
Investors are currently expecting a series of 50 basis point rate hikes over the coming months, fueling fears that the central bank could push the economy into recession, a scenario that is increasingly being incorporated into the projections. analysts.
“Tomorrow we will look at the minutes of the FOMC to see if there is any indication that the monetary policy approach may be further inclined to reconcile or moderate what was presented at the last meeting,” said Northey, of the US Bank Wealth Management.
The data released on Tuesday drew a picture of declining economic momentum, with falling new home sales and slowing business activity.
The counterpart of Fed Chairman Jerome Powell in Frankfurt, European Central Bank President Christine Lagarde said he expects the ECB’s deposit rate to rise by at least 50 basis points by the end of September.
Clothing retailer Abercrombie & Fitch Co. fell after recording a surprise quarterly loss and slashing its annual sales and margin prospects.
The work tool from home Zoom Video Communications increased after its year-round profit forecast due to strong business demand.
Cash gold rose 1 percent to $ 1,7865.80. In the oil markets, Brent crude remained almost constant at $ 113.38 a barrel, while West Texas crude fell 0.5% to $ 109.75 a barrel.
In Europe, the pan-European STOXX 600 index fell 1.1%, along with the German DAX lost 1.8% and the British FTSE fell 0.4%.
ABC / Reuters