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The Dow Jones Industrial Average fell nearly 200 points on Tuesday as traders assessed a spike in oil prices and what that could mean for the global economy.
The market losses followed the latest job openings report. In February, the number of available positions dropped below 10 million for the first time in nearly two years, a sign the once-hot labour market supporting the economy is starting to slow.
The Dow dropped 198 points, or 0.59 per cent while the S&P 500 declined by 0.58 per cent. Both indexes snapped a four-day win streak. The Nasdaq Composite slipped 0.52 per cent.
Markets have been resilient as of late, with the major averages rising even when faced by persistent inflation, a banking crisis and higher rates.
However, the latest report, in combination with the latest news that OPEC+ will be slashing output by 1.16 million barrels of oil per day, has caused more uncertainty. In response to the cuts to production, on Monday, West Texas Intermediate futures had their biggest daily gain in nearly a year.
To crypto news, amidst the disastrous headlines about the global banking industry, the prices of major crypto currencies have been on a tear away this year, with major currencies such as Bitcoin, up almost 30 per cent over the past month and 71 per cent since the start of the year, Ether, up 20 per cent over the past month and Elon Musk backed Dogecoin, which is up over 30 per cent over the past month. The vulnerability of the traditional banking system has helped boost the case for crypto, which in part, was why bitcoin was created in the first place.
To commodity news, overnight, gold futures saw a nearly 2 per cent rise and hit its highest level in over a year. The boost was attributed to weaker-than-expected jobs data from the Labor Department which caused bond yields to fall, and gold prices to rise. This marks the fifth positive session out of the last six for gold, which has gained 11.6 per cent so far this year. Gold is often viewed as a hedge against inflation.
The Biden Administration has announced that they have allocated $450 million to promote clean energy projects on existing and former mining sites, with a focus on coal communities that can provide new economic opportunities. The administration has also announced incentives in the form of billions of dollars in bonuses for clean energy developers to invest in energy communities impacted by the decline of the coal sector over the past decade.
Saudi Arabia's sovereign wealth fund, the Public Investment Fund, has invested in private equity and venture capital firms, including Blackstone and General Atlantic, through its Sanabil Investments arm. The fund, with assets of $600 billion, aims to make the kingdom's economy less dependent on oil revenues and attract foreign investment. It has made diverse investments, ranging from electric vehicles, with a majority stake in Lucid, to video gaming and sports.
Overnight, most S&P500 sectors closed lower. Utilities was the best performer, whilst Energy, which lost some of its gains made on Monday, and Utilities, were the biggest laggards.
Futures
The SPI futures are pointing to a 0.2 per cent fall
Currency
One Australian dollar at 7:20 AM is buying 67.52 US cents..
Commodities
Iron ore futures are pointing to a 3.2 per cent loss.
Gold gained 1.9 per cent. Silver jumped 4.8 per cent. Copper lost 1.8 per cent and oil gained 0.6 per cent.
Figures around the globe
Across the Atlantic, European markets closed mixed. London’s FTSE lost 0.5 per cent, Frankfurt added 0.1 per cent while Paris closed flat.
In Asian markets, Tokyo’s Nikkei gained 0.4 per cent, Hong Kong’s Hang Seng lost 0.7 per cent while China’s Shanghai Composite closed 0.5 per cent higher.
Yesterday, the Australian sharemarket closed 0.2 per cent higher at 7236.
Ex-dividends
ARB Corporation (ASX:ARB) is paying 32 cents fully franked
Clover Corporation (ASX:CLV) is paying 0.75 cents fully franked
Gowing Bros (ASX:GOW) is paying 3 cents fully franked
Imdex (ASX:IMD) is paying 1.5 cents fully franked
Qualitas Re Income (ASX:QRI) is paying 1.1416 cents unfranked
Restaurant Brands NZ (ASX:RBD) is paying 14.648 cents unfranked
Ridley Corporation (ASX:RIC) is paying 4 cents fully franked
Dividends payable
Austco Healthcare (ASX:AHC)
Coronado Global Resources Inc (ASX:CRN)
Countplus Ltd (ASX:CUP)
CSL Ltd (ASX:CSL)
Lifestyle Communities Ltd (ASX:LIC)
QANTM Intellectual Property Ltd (ASX:QIP)
Reece Ltd (ASX:REH)
Seek Ltd (ASX:SEK)
Servcorp Ltd (ASX:SRV)
Southern Cross Electrical Engineering Ltd (ASX:SXE)
Woodside Energy Group Ltd (ASX:WDS)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Disclaimer
The views, opinions or recommendations of the commentators in this presentation are solely those of the author and do not in any way reflect the views, opinions, recommendations, of Sequoia Financial Group Limited ABN 90 091 744 884 and its related bodies corporate (“SEQ”). SEQ makes no representation or warranty with respect to the accuracy, completeness or currency of the content. Any prices published are accurate subject to the time of filming and shouldn’t be relied upon to make a financial decision. Commentators may hold positions in stocks mentioned and companies may pay FNN to produce the content at times. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian Financial Services Licensee before making investment decisions. To the extent permitted by law, SEQ excludes all liability for any loss or damage arising in any way including by way of negligence.
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Source: Finance News Network