ASX Futures (SPI 200) imply the ASX will open 9 points lower, down -0.1%.
Wall Street tried to bounce but closed well-below session highs, investors are jittery ahead of tomorrow’s US inflation data - which is expected to show that consumer prices peaked in March and Morgan Stanley says retail investors have given back all their pandemic gains.
Let’s dive in.
Wed 11 May 22, 8:21am (AEST)
US 10 Yr T-bond
The overnight bounce was far from convincing as major US indices faded from session highs
Dow Jones -0.26% vs. session high of 1.57%
S&P 500 0.25% vs. session high of 1.94%
Nasdaq 0.98% vs. session high of 2.77%
Cleveland Fed President Loretta Mester spooked markets after saying "we don't rule out 75 [bp rate hikes] forever"
Mester said she wasn't ruling out more aggressive hikes in the second half of the year, if inflation remains elevated
Investors are nervous leading into US inflation data on Thursday
Consensus expects consumer prices to ease to 8.1% in April from 8.5% a month earlier
A soft inflation reading could give investors hope that price are beginning to stabilise and smooth out interest rate expectations
Morgan Stanley estimates that retail traders who jumped into stocks at the beginning of the pandemic have given back all their gains
4 out of 11 US sectors were green
Tech, energy and healthcare outperformed
Real estate, utilities, financials and staples fell the most
45% of US stocks advanced, indicating that most names continued to struggle and the market was only held up large caps
75% of US stocks trade below their 200-day moving average (75% on Tuesday, 69% a week ago)
Roblox (-5.7%, after hours: -3.4%) revenue declined by -3% in the first quarter as kids are no longer stuck at home and spending more time on screens. The video game company reported a wider-than-expected loss and missed daily active user expectations
Coinbase (-12.6% after hours: -10%) first quarter revenue fell -27% amid a major selloff across the crypto market. Retail monthly transaction users fell to 9.2m, down from 11.4m in the fourth quarter
US earnings to watch this week:
Wed: Disney, Rivian, Beyond Meat, Bumble
Australian retail sales volumes rose 1.2% in the March quarter
“Most discretionary spending industries experienced rises in volumes, despite price increases. However, food retailing fell 1.5 per cent with strong price increases for fresh food and grocery items combining with more consumers choosing to dine at hospitality venues,” said Director of Quarterly Economy Wide Statistics Ben James
NAB business confidence index fell 6 pts to +10 index points
Still above its long-run average after several months of steady increases
“Capacity utilisation continues to rise and forward orders are still well above their long-run average, supporting the positive outlook,” said NAB Chief Economist Alan Oster
Iron ore futures extended losses, down -1.3% to US$130.3 a tonne. Prices fell in response to the continued decline in markets and pessimistic outlook for iron ore in China, according to Fastmarkets
Oil is down -10% in the last two sessions amid worries about worsening economic growth
Gold prices edged lower as the US dollar continues to rally
Wednesday, 11 May 2022
Wednesday, 11 May 2022
|Lithium & Battery Tech||63.07||+1.92%|
|Aerospace & Defense||98.62||+0.18%|
|Robotics & AI||21.97||-1.27%|
Turnaround Tuesday fizzled as investors turned their attention to upcoming US inflation data.
March headline/core was 8.5%/6.5% and consensus expects a lower rate in April of 8.1%/6%.
Investors shouldn't rule out inflation acceleration, as segments like shelter and services could surprise. A higher-than-expected inflation reading would likely trigger a more hawkish view from the Fed, which would then come back to bite markets.
ETFs were rather uneventful overnight as early gains faded.
Lithium, Rare Earth/Strategic Metals and Jets (Airlines) were notable gainers, up between 0.8% and 1.9%
Hydrogen, FinTech and Copper were notable losers, down between -1.4% and -2.6%
ASX corporate actions occurring today:
Ex-dividend: NAB, RMD
Dividends paid: None
Issued shares: ADO, ADS, AS2, CNU, DVP, EMR, EPX, FBU, FSA, FZO, JGH, LEL, LGP, LNU, M2R, MCT, MDR, MFG, MGF, MKL, MNS, MTM, NBI, NZM, OSL, PNN, QEM, RMC, RPM, SRZ, T3D, TEG, THR, TMX, WR1
Other things of interest (AEST):
Australia Westpac Consumer Confidence Index (May) at 10:30 am
China Inflation Rate (April) at 11:30 am
US Inflation Rate (April) at 10:30 pm
Finance Writer & Social Media
Get the latest news and media direct to your inbox