ASX set for more losses as Wall Street buckles; $A tumbles

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Tuesday’s report on the US job market could give the Fed more reason to keep rates high. It showed employers were advertising 9.6 million job openings at the end of August, much higher than the 8.9 million that economists expected.

Such hunger for workers could keep upward pressure on wages to attract employees. While that would be welcomed by workers trying to keep up with inflation, the Fed’s fear is that could give inflation more fuel.

“It’s a classic good news is bad news because the potential impact of higher interest rates on both the economy and markets is becoming concerning as the yield on the 10-year Treasury note continues to march higher,” said Yung-Yu Ma, chief investment officer at BMO Wealth Management.

Big Tech stocks were some of the heaviest weights on the market. They and other high-growth stocks are seen as some of the biggest victims of high interest rates. Amazon fell 3.1 per cent, Microsoft dropped 2.5 per cent and Nvidia lost 1.8 per cent.

Several other challenges are also tugging at Wall Street, besides higher yields. The resumption of student-loan repayments could drag on spending by US households, which has been strong enough to help keep the economy out of a recession despite high interest rates. Higher oil prices are threatening to worsen inflation, and economies around the world look shaky.

A weaker recovery than expected in China’s economy was one of the main reasons McCormick, a maker of cooking spices, reported slightly weaker revenue for its latest quarter than analysts expected. Its profit matched expectations, but its stock fell 9.2 per cent.

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The world’s second-largest economy is also facing a crisis within its property development industry, and Hong Kong’s Hang Seng index tumbled 2.7 per cent as investors unloaded stocks of developers.

However, China Evergrande jumped 28 per cent after resuming trading Tuesday. Its shares were suspended last week as the troubled real estate developer announced that its chairman was under investigation.

Markets in mainland China and South Korea remained closed for holidays, while Japan’s Nikkei 225 index fell 1.6 per cent. Stocks were also lower across much of Europe.

On Wall Street, Point Biopharma, which develops cancer-fighting treatments, soared 85 per cent after Eli Lilly said it was buying the company for about $US1.4 billion ($2.2 billion) in cash. Eli Lilly fell 3.7 per cent.

Oil prices were ticking higher a day after slumping sharply to trim their big gains since the summer.

A barrel of benchmark US crude rose 1.2 per cent to $US89.90 after charging mostly higher from $US70 during the summer. Brent crude, the international standard, rose 0.8 per cent to $US91.44 per barrel.

AP

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