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US equities finished lower in Monday trading, ending near the worst levels.
Investors are anticipating what could be a volatile week of trading ahead of Federal Reserve Chairman Jerome Powell’s latest comments on inflation at the central bank’s annual Jackson Hole meeting.
Latest Reuters poll of economists highlighted expectations for the Fed to hike 50bp next month in line with market pricing.
In Europe, a number of concerns are focused on natural gas prices hitting record highs in Europe overnight amid the latest update from Russia that it would stop Nord Stream pipeline for three-days of maintenance this month.
Some of the more cautious strategists are increasingly highlighting stretched valuations and risk of a more meaningful deterioration in earnings revisions,
And China has been forced to cut interest rates again , in an effort to bring a little relief to the country’s huge construction and real estate sector. The rate cut comes as record-high temperatures and a severe drought have crippled hydropower and prompted the shutdown of many factories in west-central China, an industrial base.
Overnight the Dow fell 1.91 per cent, The S&P 500 dropped 2.14 per cent and the Nasdaq Composite tumbled 2.55 per cent.. Those losses come on the back of a losing week, which snapped a four-week winning streak for the S&P 500. Still, the broader market index remains about 13 per cent above its June lows.
Across the sectors Tech stocks declined on concerns over more aggressive rate hikes from the Fed. Amazon fell 3.6 per cent. Semiconductor stocks dropped with Nvidia down about 4.6 per cent. Shares of Netflix were roughly 6.1 per cent lower following an earnings downgrade.
The Semiconductor industry is now reportedly bracing for a downturn due to an oversupply of chips— the exact opposite of the challenge it’s dealt with for the last few years due to COVID. Citigroup, told Bloomberg they expects the coming semiconductor downturn to be “the worst in at least a decade, and possibly two.”
In Europe their energy crisis has unleashed a global battle over natural-gas tankers, leading to a shortage of ships and further boosting the fuel’s record prices. LNG and the tankers that carry the fuel were in high demand even before the Ukranian conflict, as extreme weather curtailed hydropower and many economies sought to ditch coal to reduce carbon emissions. The war has turbocharged that trend.
The trend is also playing out in the US as Bloomberg reports New York gasoline inventories are so low that suppliers are resorting to expensive US vessels to move fuel into the region. Gasoline and diesel tanks in the New York Harbour region are at their emptiest levels in the nearly three decades of government recordkeeping
It appears that an energy crisis is playing out across the globe at present
Currencies
One Australian dollar at 7:15 AM is flat compared to the US dollar yesterday, buying 68.76 US cents (Mon: 68.76 US cents), 58.53 Pence Sterling, 94.58 Yen and 69.15 Euro cents.
Commodities
Iron ore futures are pointing to a 0.5 per cent gain.
Gold lost $14.50 or 0.8 per cent to US$1748 an ounce.
Silver was down $0.20 or over 1 per cent to US$18.98 an ounce.
Copper was down $1.75 or 0.5 per cent to US$365.35 a pound.
Oil prices bounced off session lows to trade nearly flat in a volatile session on Monday, after Saudi energy minister said OPEC+ could cut production to confront market challenges. Oil closed 0.6 per cent lower
Futures
The SPI futures are pointing to a 0.6 per cent fall.
Ex-dividends
There are six companies set to trade without the right to a dividend.
Australian Clinical Labs (ASX:ACL) is paying 41 cents fully franked
Australian United Investment Company (ASX:AUI) is paying 20 cents fully franked
Domain Holdings Australia (ASX:DHG) is paying 4 cents fully franked
Diversified United Investment (ASX:DUI) is paying 9 cents fully franked
IPH (ASX:IPH) is paying 16 cents 50 per cent franked
Qualitas (ASX:QAL) is paying 4 cents fully franked
Dividends payable
There are three companies set to pay eligible shareholders today.
Dexus Convenience Retail REIT (ASX:DXC)
Dexus Industria REIT (ASX:DXI)
Transurban Group (ASX:TCL)
Figures around the globe
Across the Atlantic, European markets closed lower. Paris fell 1.8 per cent, Frankfurt dropped 2.3 per cent and London’s FTSE closed 0.2 per cent lower.
Asian markets closed mixed. Tokyo’s Nikkei fell 0.5 per cent, Hong Kong’s Hang Seng lost 0.6 per cent and China’s Shanghai Composite closed 0.6 per cent higher.
Yesterday, the Australian sharemarket fell almost 1 per cent to 7047.
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
