To the scoreboard:
- Dow: 24,688.31 -296.24 (-1.19%)
- S&P500: 2,658.69 -46.88 (-1.73%)
- AUD/USD: 0.7096 +0.0015 (+0.21)
- ASX SPI futures (December contracts): 5,644 (-17)
1. ASX futures are pointing lower this morning after another sharp fall in US stocks to end the week. The tech sector was hardest hit, as Amazon lost almost 8% when its profit guidance fell short of Wall Street’s expectations. The S&P500 is now in negative territory for the year:
2. The stock selloff overshadowed a strong print for US GDP, which showed annual growth of 3.5% for Q3. But the report also showed Trump’s tariffs against China took a major bite out of growth, as the contribution from trade to GDP fell to its lowest level in 33 years.
3. Safe-haven assets found demand on Friday night, as US 10-year bond yields fell to a three-week low and the Japanese yen strengthened. Oil rallied back above $US77 a barrel while it seems like nothing can stop the momentum in iron ore markets, as prices continue to surge.
4. After further weakness in China’s currency rattled global markets on Friday, the yuan steadied in overnight trade. Westpac’s Sean Callow said a stronger yuan helped provide support for the AUD, which ignored the risk-off sentiment on Friday night to bounce off its February 2016 lows.
5. In addition to China’s currency, there’s a long list of global risk factors keeping markets on edge: rising US interest rates, US-China trade fears, Italy’s debt crisis and Brexit uncertainty. And US politics will come in to focus this week as the major parties push for votes ahead of November’s mid-term elections.
6. And in addition to all of that, it’s a busy schedule of key data in Australia this week as well. There’s the Q3 inflation print on Wednesday, along with retail sales, building approvals, trade figures and monthly home price data. The full calendar is here.
Today’s economic calendar:
- Retail sales data for Japan and Germany.
- US PCE inflation data for September.
Have a great week.
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