Market delicately poised ahead of key inflation data: RIO buys into critical minerals
US stocks fell Tuesday, reversing earlier gains as investors looked ahead to key inflation data and earnings out later in the week.
On Wednesday, the producer price report will be released, followed by the September consumer price index Thursday. On Friday, September retail sales will give further insight into consumption.
Overnight, the International Monetary Fund downgraded its global growth projections for next year and warned of a harsh worldwide recession if policymakers mishandled the fight against inflation.
The S&P 500 slipped 0.65 per cent, but was off of earlier declines that pushed the index to its lowest level since November 2020. The Nasdaq Composite fell 1.10 per cent to its lowest close since July 2020. The Dow Jones Industrial Average rose 36 points, or 0.12 per cent, bolstered by jumps in Amgen and Walgreens Boots Alliance.
Stocks fell off highs of the day and bond yields ticked up when the Bank of England said its market intervention will be over soon, and that pension funds have just three days to rebalance positions. UK pension funds however have asked the BOE to extend their bond purchases.
To add to the gloom, JPMorgan CEO Jamie Dimon warned this week that the US would likely fall into a recession over the next “six to nine months,” and said the S&P 500 could fall another 20 per cent depending on whether the Federal Reserve engineers a soft or a hard landing for the economy.
This week also kicks off earnings season. On Friday, JPMorgan, Wells Fargo, Morgan Stanley and Citi – four of the world’s largest banks – report quarterly earnings.
Across the sectors, no real consistent leadership from any industry – with semis, software, media and streaming underperforming.
In company news, Rio Tinto plans a $500mn Canadian investment in the critical minerals space to source titanium and scandium in the west rather than from China. The materials are essential to aerospace, medical products and fuel cells. China produces three-quarters of finished titanium products and 61 per cent of scandium globally.
In Europe, LVMH, the world’s biggest luxury group, showed little sign of weakening demand for its high-end handbags and champagne in the third quarter despite growing fears over the global economy. The company controlled by Europe’s richest man, Bernard Arnault, reported quarterly sales of €19.8bn, ahead of analysts’ expectations . Louis Vuitton and Christian Dior brands generate two-thirds of group operating profit.
Currencies
The $US Dollar index was slightly higher with sterling weakness the big FX story.
One Australian dollar has continued to weaken compared to the US dollar buying 62.75 US cents (Tue: 62.97 US cents), 57.22 Pence Sterling, 91.49 Yen and 64.64 Euro cents.
Commodities
Iron ore futures are pointing to a 1.9 per cent fall.
Gold shed $1.90 or 0.1 per cent to US$1673 an ounce.
Silver fell $0.46 or 2.4 per cent to US$19.16 an ounce.
Copper lost $1.00 or 0.3 per cent to US$342.05 a pound.
Oil dropped $2.53 or 2.8 per cent to US$88.60 a barrel.
Futures
The SPI futures are pointing to a 0.3 per cent fall.
Figures around the globe
Across the Atlantic, European markets closed lower. Paris fell 0.1 per cent, Frankfurt lost 0.4 per cent while London’s FTSE closed 1.1 per cent lower.
In Asian markets, Tokyo’s Nikkei dropped 2.6 per cent, Hong Kong’s Hang Seng fell 2.2 per cent while China’s Shanghai Composite added 0.2 per cent.
Yesterday, the Australian sharemarket lost 0.3 per cent to close at 6645.
Ex-dividends
Future Generation Global Invstmnt Co (ASX:FGG) is paying 3.5 cents fully franked
Gowing Bros (ASX:GOW) is paying 4 cents fully franked
Horizon Oil (ASX:HZN) is paying 1.65 cents unfranked
Regis Resources (ASX:RRL) is paying 2 cents fully franked
WAM Global (ASX:WGB) is paying 5.5 cents fully franked
Dividends payable
BlueScope Steel (ASX:BSL)
Briscoe Group (ASX:BGP)
Countplus (ASX:CUP)
MAAS Group Holdings (ASX:MGH)
News Corp (ASX:NWS)
NRW Holdings (ASX:NWH)
Perseus Mining (ASX:PRU)
PSC Insurance Group (ASX:PSI)
Sigma Healthcare (ASX:SIG)
Southern Cross Electrical Engineering (ASX:SXE)
TPG Telecom (ASX:TPG)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Copyright 2022 – Finance News Network
Source: Finance News Network
