To the scoreboard:
- Dow: 25,027.07 -799.36 (-3.10%)
- S&P 500: 2,700.82 -89.55 (-3.21%)
- AUD/USD: 0.7340 -0.0018 (-0.24%)
- ASX200 SPI futures (December contracts): 5,627 (-73)
1. Things just got ugly: US stocks slumped overnight as the Dow fell 3.1% — its biggest percentage drop since October 10. Optimism on trade turned to doubt, as Trump appointed the hawkish Robert Lighthizer as new chief China negotiator while key details on a broader trade agreement remain unclear.
2. Bond markets send a warning: Benchmark US 10-year bond yields fell 8 basis points to 2.91%, as markets reassess the outlook for interest rates hikes and global growth. That left the 2-10 yield spread — a well-known recession indicator — at just 11 basis points, around half what it was a week ago.
3. Amid the ongoing volatility in stocks, strategists at Societe Generale say a key technical indicator called the Elliott Wave Principle is signalling the end of the stock bull market and a “deep and prolonged correction” is coming.
4. Risk-off sentiment weighed on the Aussie dollar, after it had another go at breaking through US74 cents overnight. China’s renminbi posted its biggest two-day gain against the greenback since 2005, as the USD started weaker before strengthening in the overnight session.
5. Brent crude oil prices extended this week’s winning streak amid continued speculation around OPEC supply cuts.. Gold was up slightly in the risk-off environment, while Bitcoin steadied off its overnight lows and is trading at around $US3,900 this morning.
6. It’s GDP day: In what could be a big day on Asian markets, Australia’s economic scorecard for Q3 is due out at 11:30am AEDT (forecast 0.6 q/q, 3.3% y/y). With house prices in decline, analysts will on the lookout for any signs of falling consumption. David Scutt’s 10-second guide is here.
Today’s economic calendar:
- Australia Q3 GDP figures.
- Australian services PMI data for November.
- Services PMIs for Japan, the UK, US and Europe.
- Fed chair Jerome Powell testifies before US Congress.
- US Federal Reserve Beige Book.
- Bank of Canada interest rate announcement.