The ASX will be heading lower this morning after Wall Street slid on Friday in the wake of the White House warning that the chances of a Russian attack on Ukraine had risen and could happen during the Beijing Winter Games (which end next Sunday).
That saw the ASX overnight futures market closed down 33 points early Saturday, Sydney time after Wall Street lost more ground in the final two hours after the White House warning.
That points to the weak start today which wasn’t offset by news that Western governments including the US, UK, Australia, NZ and EU had urged their citizens in Ukraine to leave to leave now given the rising chance of a Russian attack.
That was after the ASX 200 closed 1% lower on Friday, down 71.2 points to 7,217.3, leaving it up 1.3% for the week.
Fears about a looming rate rise from the US Federal Reserve – possibly 0.50% instead of the accepted 0.25% – were overtaken by the late surge in concern about the situation in the Ukraine region.
A Russian attack would see all talk of the rate rise evaporate, but many US analysts reckon the boost to global energy prices and therefore inflation would see the Fed ignore the negatives to market confidence and proceed as planned.
As a result of the US warning, oil jumped, as did gold, copper and silver while US bond rates fell as nervous investors sought safe havens (helping explaining gold’s quick reversal from Thursday’s slump).
The S&P 500 fell 1.9% on Friday to end the week at 4,418.64 and lost 1.8% for the week.
Techs took another pounding Friday with the Nasdaq Composite dropping 2.8% to 13,791.15 and losing 2.2% for the week.
The Dow retreated 1.4% to 34,738.06, ending the week 1% lower.
The Nasdaq is now down nearly 12% year to date, the Dow is down more than 4% and the S&P 500 has dropped 7.3% from the start of 2022.
The ASX 200 has done better than those year to date with a drop of a fraction over 3%.
The 10-year US Treasury yield fell 11.3 basis points to 1.92%.
Europe’s STOXX 600 index closed 0.6% lower, but added 1.6% last week, its best performance since late-December.
The Shanghai market was up around 1.6% for the week, the Hong Kong market was up 1.2% for the week and the Nikkei in Japan was up 2.2%.
All closed before the US warning came early Saturday, Australian time.
