ASX 200 futures are down 71pts (-0.86%) as of 8:30 am AEDT.
In a nutshell:
The quick jump in yields is trouble for stocks
US 10-year yield almost never rallies with such strength and any further surges are bad news for fragile markets
This is driving a big risk-off episode, with three US sectors tumbling more than 2pc on Friday (real estate, financials and tech)
Let's dive in.
Mon 13 Jan 25, 8:23am (AEDT)
Mon 13 Jan 25, 8:23am (AEDT)
Major US benchmarks finished lower and trading around the lowest level since late November
US weekly recap – Russell 2000 (-3.49%), Nasdaq (-2.34%), S&P 500 (-1.94%) and Dow Jones (-1.86%)
Today’s big story – US unemployment and nonfarm payrolls well-ahead of consensus, raising concerns about stalling inflation progress
Bond yields soared on this data, the market is now expecting no rate cut at the Fed’s Jan-29 meeting and less than 30 bps of cuts for the year, according to CME’s FedWatch tool
US 10-year Treasury yield trading at the highest level since October 2023, recent move (up ~55 bps in one month) is more than two standard deviations on a one-month basis
High bar for Q4 earnings season with focus on broadening earnings momentum, slowdown in big tech growth, Trump tariffs, elevated margins, dollar strength (BBG)
10-year yields above 5% on deficit, policy uncertainty and sticky inflation concerns could signal more trouble for stocks (BBG)
New US sanctions on Russian energy industry will force Chinese and Indian refiners to source more oil elsewhere, boosting prices and freight costs (RT)
Apple's 2025 plans involve overhauled iPhone line, new AI features, smart home focus and updates to products it has not refreshed for some time (BBG)
Bank earnings kick off this week with annual outlooks and expectations for dealmaking and capital markets revival likely to overshadow Q4 results (BBG)
Delta shares soar on 4Q24 revenue and EPS beat, company survey showed 90% of companies expect to lift travel spend this year (CNBC)
Jefferies shares dip 10pc despite 4Q24 profit more than tripling year-on-year amid investment banking recovery (RT)
US insurance stocks like Allstate and Chubb dip 3-6% amid the devastation caused by the Los Angeles wildfires (CNBC)
US December nonfarm payrolls up ~256,000 vs. 150-160,000 consensus, unemployment rate ticked lower month-on-month to 4.2% (RT)
US January consumer sentiment at 73.2, in-line with consensus and down from 74.0 in December, year-ahead inflation expectations soared from 2.8% last month to 3.3% and now the highest since May-24 (RT)
Mon 13 Jan 25, 8:23am (AEDT)
ASX 200 futures pointing at a steep fall at the open, dragging the index to a one-week low
Markets path of least resistance has flipped to lower as recent data continues to flag rising inflation risks (US ISM services price paid index hit a 22-month high, Trump reaffirms tariff plan, oil prices hit four-month high etc)
Risk-off episode looks largely like a bond market tantrum, which makes upcoming data points like next week's US CPI and PPI a possible reversal catalyst
Bain Capital to match CC Capital’s $4.30 a share bid for Insignia Financial (AFR)
Vulcan Energy produces first battery quality lithium at its downstream optimisation plant (VUL)
Relative resource strength: Commodity prices ticked higher overnight, led by oil (+3.1%), nickel (+1.5%) and gold (+0.7%). But related equities struggled to capture more upside amid broader market weakness (e.g. Gold Miners ETF up just 0.19%, down from session high of 2.79%).
Rate-sensitive sectors: The three worst performing US sectors were real estate (inverse relationship with yields), financials (weaker-than-expected earnings, also recently trading with strong correlation to yields) and tech.
Flight Centre initiated Overweight with $22 target (MS)
Waypoint REIT initiated Overweight with $2.70 target (JARD)
Stocks trading ex-dividend:
Mon 13 – Tue 14 Jan: None
Wed 15 Jan: Tower (TWR) – 4.07%
Thu 16 – Fri 17 Jan: None
Other ASX corporate actions today:
Dividends paid: Eumindi Group (EBG)
Listing: None
Earnings: None
AGMs: None
Economic calendar (AEDT):
10:30 am: Australia ANZ-Indeed Jobs Ads (Dec)
11:00 am: Australia TD-MI Inflation Gauge (Dec)
1:00 pm: China Balance of Trade (Dec)
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