Australian stocks are expected to start the day slightly higher despite falling global stock markets, as investors ponder how aggressive the US Fed will be this week.
Key points:
- Overnight, the Dow Jones Industrial Average fell 0.5 percent, the S&P 500 lost 0.2 percent and the Nasdaq Composite closed unchanged.
- The pan-European STOXX 600 index lost 0.5 percent
- Oil bounces as Saudis talk of cutting output
ASX futures were up 15 points or 0.2 percent at 6,880 by 7:15am AEST.
At the same time, the Australian dollar was stable at 69.26 US cents.
Wall Street closed lower on Tuesday as investors focused on data showing an economic slowdown ahead of the US Federal Reserve meeting this week in Jackson Hole, Wyoming.
The S&P 500 fell after data showed private-sector business activity in the United States contracted for the second straight month in August, with particular weakness in the services sector as demand weakened in the face of inflation and weather conditions. stricter financial
The S&P Global Flash Composite Purchasing Managers’ Index, or PMI, for August fell to 45, the lowest since February 2021, from 47.7 in July. A reading below 50 indicates a contraction in activity.
Stocks have slipped in recent sessions ahead of this week’s central bank meeting in Jackson Hole, where Fed Chairman Jerome Powell is expected to reinforce a strong commitment on Friday to stamp out inflation that is in a maximum of four decades.
Traders are torn between expecting a 50- to 75-bp hike from the central bank after several policymakers recently dismissed expectations of a dovish turn and emphasized the Fed’s commitment to fighting inflation.
“What we saw last week is the realization that the Fed could still raise interest rates by 75 basis points in September,” said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma.
“The market fears that Powell will take an aggressive stance again.”
The benchmark 10-year yield rose to its highest level since late July.
Zoom Video Communications fell nearly 17 percent after the former “stay-at-home” stock favorite cut its full-year earnings and revenue forecasts.
Of the 11 S&P 500 sector indices, seven fell, led by real estate, down 1.5 percent, followed by a 1.4 percent loss in health care.
The S&P 500 fell 0.2 percent to close the session at 4,129 points.
The Nasdaq was unchanged at 12,381 points, while the Dow Jones Industrial Average fell 0.5 to 32,910 points.
Gold snapped a six-session losing streak as the dollar weakened, while oil rose nearly 4 percent after Saudi Arabia floated the idea of ​​production cuts by the Organization of the Petroleum Exporting Countries and its affiliates. allies.
At 07:13am AEST, Brent crude oil was higher, trading at $100.22 a barrel.
The MSCI World Stock Index fell 0.3 percent, while the STOXX index of European company shares closed down 0.4 percent, after falling for almost a week.
ABC/Reuters
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