Last Night's Market Recap
Overnight – Wall Street Falls Due to Powell’s Influence and Geopolitical Uncertainties
Australian shares were poised to open lower following a nearly 1% drop in US stocks. This decline was influenced by Jerome Powell’s remarks, which left room for higher interest rates if the economy maintains its rapid expansion. Additionally, increased tensions in the Middle East also made investors cautious.
The ASX futures dropped by 45 points or 0.6%, and significant US indices such as the Dow, S&P, and Nasdaq fell by 0.8%, 0.9%, and 1% respectively. Notable companies like Tesla saw a 9.3% drop in their shares, while Netflix shares surged by 16.1%.
Powell Speech
Federal Reserve Chairman, Jerome Powell, addressed the recent spike in US bond yields, attributing it to three primary reasons: the market’s reassessment of economic resilience against high interest rates, heightened attention towards fiscal deficits, and a shifting correlation between bonds and equities. Powell clarified that the rise is not mainly due to expectations of increased inflation or immediate policy changes. Instead, it reflects broader economic and fiscal considerations and changing market dynamics, with these factors having a more significant influence than anticipations of the Federal Reserve’s future actions.
Earnings Results
American Airlines’ Q3 profits surpassed Wall Street expectations, despite a lowered full-year earnings forecast due to rising jet fuel prices. The company now anticipates an adjusted full-year earnings between $US2.25 and $US2.50 per share.
Canada Goose Holdings’ shares dropped significantly due to economic and consumer pressures, resulting in analyst downgrades and record low share values.
Netflix shares experienced a surge following their announcement of price increases for some plans in various countries, coupled with the addition of 9 million new users in Q3.
Tesla’s shares decreased as the company failed to meet Wall Street’s Q3 expectations regarding gross margin, profit, and revenue.
weighed.
S&P 500 - Heatmap
Commodities
Bonds
The Day Ahead
ASX SPI 6941 (-2.25%)
In today’s ASX, several companies are under the spotlight. Key sales and production reports are anticipated from Alumina, Atlas Arteria, Growthpoint Properties, Lynas Rare Earths, and Yancoal, which are likely to influence market activities. Concurrently, important Annual General Meetings (AGMs) are scheduled with presentations from EVT, Cleanaway Waste Management, Macmahon, and Worley. Additionally, trading of Liontown Resources’ shares is expected to recommence, garnering significant market attention.
On the economic agenda, various local and international data releases are poised to impact market trends. Locally, the announcement of New Zealand’s trade balance for September is eagerly awaited. Overseas, the focus will be on the release of Japan’s Consumer Price Index (CPI) for September, as well as the UK’s retail sales data, public sector borrowing figures for September, and the unveiling of the GfK consumer sentiment data for October. These essential economic indicators are anticipated to play a crucial role in shaping the market’s direction.
Calendar
Economic
US Quarterly Earnings
