What's Affecting Markets Today
US falls as Powell says March cut unlikely
U.S. financial markets experienced a significant downturn as Federal Reserve Chairman Jerome Powell indicated that a rate cut in March is unlikely. The Dow Jones Industrial Average dropped by 0.82%, the S&P 500 by 1.61%, and the Nasdaq Composite by 2.23%. Concurrently, 10-year U.S. Treasury yields fell below the critical 4% level as investors reacted to the Fed’s statements. On a positive note, Qualcomm exceeded expectations in its quarterly earnings, reporting a 16% YoY surge in handset chip sales, amounting to $6.69 billion in the December quarter. Meta’s ongoing success is attributed to the performance of Chinese low-cost retailers Temu and Shein, substantial contributors to Meta’s advertising rebound, according to marketing expert Victor Lee. In a legal development, a judge dismissed Disney’s lawsuit against Florida Gov. Ron DeSantis, alleging retaliation related to criticism of a controversial parental rights law, with Disney expressing intent to appeal the ruling.
ASX Stocks
ASX 200 - 7590.4 (-1.2%)
Key Highlights:
On Thursday, the S&P/ASX 200 Index retreated from a record, experiencing a 1.3% decline at midday, led by the resources, energy, and tech sectors. Data from the Australian Bureau of Statistics revealed a 9.5% slump in building approvals for December, signaling a concerning trend in home-building. Despite approximately 160,000 approvals last year, underlying demand suggests a need for around 220,000 dwellings, indicating a potential housing undersupply in Australia. Concerns about the banking sector emerged, with a suspicion that banks are acknowledging an anticipated increase in loan losses, particularly in commercial real estate. Analysts note that banking issues persist, and tight U.S. monetary policy may pose risks of a financial downturn. On Wall Street, rate-cut expectations diminished after Federal Reserve Chairman Jerome Powell expressed the unlikelihood of rate cuts in March, leading to a 13 basis points drop in the yield on 10-year U.S. treasuries to 3.93%. Stock movements included a 1.8% decline in Nufarm shares and a 3.5% drop in Block, the tech bellwether and Afterpay-owner, anticipating significant job cuts. IGO Ltd and lithium partner Mineral Resources saw declines of 4.4% and 3.4%, respectively, while asset manager Pinnacle awaited highly anticipated earnings after the closing bell.
Leaders
CCP Credit Corp Group Ltd 6.45%
SKC Skycity Entertainment Group Ltd 5.67%
RED RED 5 Ltd 4.76%
TAH Tabcorp Holdings Ltd 3.75%
AX1 Accent Group Ltd 2.97%
Laggards
EMR Emerald Resources NL -7.04%
RSG Resolute Mining Ltd -6.98%
RRL Regis Resources Ltd -6.22%
AWC Alumina Ltd -5.58%
ERA Energy Resources of Australia Ltd -4.92%