Wall Street was dumped on Monday again making a mockery of the rebound in Asia earlier in the session, including Australia.
Our market dragged itself to a 19.5 point rise in the ASX 200 on Monday by the close, this morning the index is looking at a 60 plus point slump after the big sell-off in New York took the Dow down more than 602 points or 2.3%.
The S&P 500 fell nearly 55 points or 1.97% while the Nasdaq was harried all the way down by the weakness in Apple and other tech stocks. It lost more than 206 points or 2.78%.
Wall Street’s confidence was undermined by a combination of a misreading of the oil market, weakness in shares in Apple, Goldman Sachs and General Electric, an 18 month high in the US dollar, worries about the impact of the terrible fires in California and more confused tweeting from Donald Trump as he sought to blame the market fall on the Democrats and not the more substantive factors.
Apple shares shed 5% on fears of lower profits after a key supplier for the iPhone cut its profit forecast. Goldman Sachs shares dropped 7.4% as the 1MDB scandal in Malaysia continues to see more senior figures (current and former) named as being linked in some way to this multi-billion dollar corruption scandal that has already seen two senior bankers from the firm charged.
And GE shares fell 6.8% after its newish CEO said the company has too much debt and needs to reduce it quickly. And shares in big Californian power utility, PG&E fell more than 17% on growing fears of its culpability in one of the two terrible fires ravaging parts of California
US oil futures fell under $US60 a barrel for the first time since February, marking a record 11 straight session declines after the market completely misread reports that suggested Saudi Arabia might be ready to cut oil production from its current high level
That saw an early 2% rise as the reports had the market believing the Saudis were on the verge of cutting production because of a surge in supplies and the smaller than expected reduction in Iranian exports.
Donald Trump tweeted against it, analysts claimed it as fact but the market finally ignored it and sent prices lower for yet another session. The 11 session fall in the now the longest since 1984!
Rising global crude production and President Donald Trump’s decision to issue waivers, allowing eight countries (including Turkey, Japan, India, China, and South Korea) to continue importing Iranian oil despite American sanctions, have fed concerns over a potential global supply glut.
December West Texas Intermediate oil lost 26 cents, or 0.4%, to settle at $US59.93 a barrel in New York and fell another 20 US cents in after-hours trading. Brent had earlier ended under$US70 a barrel for the first time in a while, settling around $US69.88 for a loss of 0.4%.
Comex gold settled lower, ending the regular session just above $US1,200 an ounce, then edged back to around $US1,204 in early Asian trading where it was down half a percent. Chinese iron ore prices fell 1.5% to $US76.15 a tonne, Comex copper fell half a per cent to $US2.6715 a pound.
