Markets Cool As Tax Reform Becomes Reality
It is going to be a miserable day on the ASX, is the overnight trading on Wall Street and the futures markets are any guide, with big falls, matched by a sell down in some key commodities such as copper which suffered its biggest one day slide in two years in London and New York with losses of well over 4%.
Wall Street battled to remain positive for most of the session before giving up the ghost and lurching into the red, especially the Dow and the Nasdaq. The Dow was down 0.45%, the S&P 500 was off nearly 0.4% and Nasdaq fell 0.2%.
While oil was firmer, gold fell to four month lows, copper in fact lost 4.7% in New York (and close to 4.4% in London), iron ore retreated back under $US72 a tonne and the ASX futures market was showing a loss of around 25 points his morning ahead of trading starting locally at 10 am.
The local market closed 0.2% on Tuesday and the opening falls will build on that negative tone this morning.
The fall in iron ore prices was the first for a week - small, only 91 cents to $US71.77 a tonne on the Metal Bulletin Index, but it was indicative of the tone in markets overnight
Gold fell sharply lower overnight Tuesday, dropping to a nearly four-month low as a stronger US dollar February hit confidence.
Comex gold futures fell $US12.80, or 1%, to settle at $US1,264.90 an ounce—the lowest settlement since August 8, according to FactSet. They recovered a touch in early Asian trading to around $US1,269 an ounce.
Elsewhere on Comex, March silver futures fell 1.9% to $US16.068 an ounce, but March Comex copper futures dropped 4.7% to $US2.946 a pound, ending at its lowest in more than two months, and 25 cents off its most recent high last month of around $US3.19 a pound.
In London, LME copper lost 4.35% to $US6,529.00 a tonne a tonne as inventories rose, the biggest one session fall in two years. Other metals, such as nickel and zinc, also fell in sympathy.
Traders said the rise in inventories contributed to the fall. Inflows of stocks at LME-registered warehouses rose 10,650 tonnes to 192,550 tonnes, industry data showed.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.