ASX Futures (SPI 200) imply the ASX 200 will open 12 points higher, up 0.2%.
Wall Street continued to sell off amid rising recession fears, US inflation is beginning to ease, oil prices fell sharply as the demand outlook weakens and Oceania Lithium is set to make its ASX debut at 12:00 pm AEST.
Let’s dive in.
Fri 01 Jul 22, 8:23am (AEST)
|US 10 Yr T-bond||2.972||-3.91%|
Things were quite ugly on the final trading day of the quarter/half, exacerbated by investors and funds rebalancing their portfolios.
The S&P 500 fell -21% in the first-half, worst since 1970
The Nasdaq 100 down -30% in the first-half, worst since 2002
Major US indices extended losses amid more disappointing economic data. The world’s largest economy is clearly weakening as consumer spending softens, but encouragingly, inflation is also beginning to show signs of topping.
3 out of 11 US sectors advanced
Defensives including Utilities, Industrials, Real Estate and Staples outperformed
Energy, Discretionary and Tech continue to sell off
56% of US stocks declined
76% of US stocks trade below their 200-day moving average (75% on Thursday, 77% a week ago)
It was a terrible quarter for tech stocks (June quarter performance):
Tesla -37.5%, worst quarter on record
Amazon -35%, worst quarter since 2001
Alphabet -22%, worst since 2011
Microsoft -17%, worst quarter since 2010
Back to overnight headlines and movers:
Micron Technology (-1.3%) said smartphone unit sales expectations have declined meaningfully for 2022
Walgreen Boots Alliance (-7.3%) beat earnings expectations but warned that a slowdown in demand for covid vaccines weighed on profits
RH (-10.6%) slashed its full-year outlook. The high-end furniture chain said demand for its products could continue to soften heading into the second-half
China’s manufacturing PMI was 50.2 in June
Slightly below the 50.5 expected by a Reuters poll
The 50-point mark separates expansion from contraction
The index was below 50 for the last three months
Unsurprisingly given major lockdowns in Shanghai and Beijing are being lifted
China’s services PMI was 54.7 in June
Services PMI was also contracting for the last three months
Canada’s GDP rose 0.3% year-on-year in April, in-line with expectations
The growth was led by mining, quarrying and the oil and gas extractor sector, according to Statistics Canada
Early estimates for May indicate the economy contracted -0.2%
US personal spending rose 0.2% month-on-month in May
The smallest monthly gain this year
In response to soft spending figures, economists at S&P Global Market Intelligence cut their estimates for GDP growth to -1.5% for Q2
US personal consumption expenditure rose 6.3% year-on-year in May
US Core PCE rose 4.7% year-on-year in May
Excludes volatile food and energy items
Lowest annual increase since 2021
The Fed views the PCE index as the best barometer of inflation trends
Signals that the economy is beginning to slow as spending wanes in the face of high inflation and rising interest rates
Iron ore prices edged lower amid depressed market sentiment, with a short-term oversupply of high-grade fines likely, sources told Fastmarkets
Oil prices rolled over as the outlook for gasoline usage disappointed. The once easy trade has disappeared as investors focus on demand weakness rather than supply tightness
Gold continues to struggle in the face of a strong US dollar and continued Fed tightening calls
Friday, 01 July 2022
Friday, 01 July 2022
|Lithium & Battery Tech||72.58||+0.06%|
|Aerospace & Defense||97.4||+1.82%|
|Robotics & AI||20.6||-1.36%|
I'm almost considering writing nothing under 'ASX sectors to watch' as who knows where the first day of the financial year might take us.
SPI futures were pointing to a flat open on Thursday but the ASX 200 closed a sharp -1.97%, with a massive selloff taking place in the final hour of trade.
Today, SPI futures suggest a slightly positive open. But that's hardly encouraging given the weak lead from Wall Street and the wrath of disappointing economic data.
Most overnight ETFs were red and down between 1-3%, including Steel, Copper Miners, Fintech, Uranium and Jets.
Energy has been the worst performing US sector in the last two sessions.
Oil has done a sharp U-turn from an easy trade where dips were supported by tight supply and the lack of spare production capacity, to a potentially deteriorating demand outlook.
"The OPEC+ decision to maintain the planned 648,000 bpd oil increase in August went as expected, but traders are focusing more on President Biden’s trip to Saudi Arabia," said Oanda senior market analyst, Ed Moya.
"Biden is going to try to get the Gulf alliance to pump more crude and if he is successful, oil could tentatively test below the US$100 level."
ASX corporate actions occurring today:
Ex-dividend: NBI, MGF,
Dividends paid: ALL, ANZ, CSR, PDL, VRT
Issued shares: 14D, 1AE, 4DS, AGS, B4P, BRN, CAN, CHM, CMM, COE, CPV, CU6, DME, EMV, EUR, GLA, HRZ, HSN, ICT, IVZ, LDX, LKE, LMG, MGF, NAB, NBI, NML, OCL, OZM, PBL, RF1, RRL, SEQ, SFC, SLC, SPA, STX, TOR, VMY, XTC
Other things of interest (AEST):
China Caixin Manufacturing PMI (June) at 11:45 am
EU Inflation (June) at 7:00 pm
US Manufacturing PMI (June) at 12:00 am
Finance Writer & Social Media
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