Home » ASX to fall, Goldman Sachs drags Dow lower

ASX to fall, Goldman Sachs drags Dow lower

Lynch said equities have clearly run into headwinds.

“By early February, the S&P 500 had climbed by almost 17.0 per cent from its low on October 12th, essentially in line with traditional bear market rallies. A combination of fundamental challenges – inflation, interest rates, and earnings – weighed on sentiment, and the index ran into technical resistance declining approximately 5.0 per cent from recent highs.”

The local currency slipped; the Bloomberg dollar spot index edged higher.

On bitstamp.net, bitcoin was 0.8 per cent lower to $US23,172 at 8.25am AEDT.

The yield on the US 10-year note was 1 basis point higher to 3.92 per cent at 4.59pm in New York.

Today’s agenda

Local: Brad Jones, RBA assistant governor (financial system), remarks at the IIF Australia Forum, Westpac – Sydney at 9.30am AEDT; Fourth quarter GDP and January monthly CPI at 11.30am AEDT

Overseas data: NZ January building permits at 8.45am AEDT; China February PMIs at 12pm AEDT; February manufacturing PMI for China (Caixin), Japan (Nikkei), UK (Markit) and US (Markit, ISM); Eurozone January CPI; US January construction spending

Other top stories

Super tax brawl looms at next election Treasurer Jim Chalmers wants a contest over super taxes at the next election by daring the Coalition to go in to bat for the wealthiest retirees.

Banks quietly offer big discounts to stop borrowers drifting to rivals Official data shows a significant rise in loans written by Macquarie as competition in the market remains elevated, forcing lenders to lower interest rates.

Chanticleer: The three gambles in Labor’s $3m super cap The super cap might be sensible, but Labor will need to spend plenty of political capital for a relatively small return.

Market highlights

ASX futures down 21 points or 0.29% to 7177 overnight

  • AUD -0.2% to 67.26 US cents
  • Bitcoin -0.8% to $US23,172 at 8.25am AEDT
  • On Wall St: Dow -0.7% S&P -0.3% Nasdaq -0.1%
  • In New York: BHP +0.9% Rio +0.8% Atlassian -0.2%
  • Tesla -0.9% Apple -0.3% Amazon +0.5% Alphabet +0.2%
  • In Europe: Stoxx 50 -0.2% FTSE -0.7% CAC -0.4% DAX -0.1%
  • Spot gold +0.7% to $US1828.58/oz at 1.51pm in New York
  • Brent crude +1.8% to $US83.96 a barrel
  • Iron ore +1.2% to $US124.15 a tonne
  • 10-year yield: US 3.92% Australia 3.85% Germany 2.64%
  • US prices as of 4.59pm in New York

GDP expectations

TD Securities:

“We expect GDP in Q4 to expand at a firm pace of 0.9 per cent q/q, 2.9 per cent y/y, more hawkish than consensus at 0.6 per cent q/q, 2.6 per cent y/y and the RBA. Our breakdown of contribution to GDP q/q growth are as follows: net exports +1.1 per cent-pt, final consumption expenditure +0.4 per cent-pt on firmer household spending and higher govt spending, gross capital formation flat and inventories -0.6 per cent-pt.

“Based on the RBA’s Feb SoMP, the Bank expects Q4 GDP at 0.7 per cent q/q, 2.7 per cent y/y, similar to the quarterly pace of expansion in the previous quarter (Q3: 0.6 per cent q/q). Our bullish view of the economy in Q4 stems from the big boost to economic activity from strong net exports growth. With unemployment at the lows, this should further support aggregate household incomes and drive economic activity. Taken together, a big upside surprise in GDP should reaffirm our cash rate terminal call of 4.35 per cent by August this year.”

United States

Target plans to invest as much as $US5 billion this year expanding services for customers, including a drive up service for returns, renovations at 175 stores and improvements in online shopping.

The Minneapolis retailer announced the investments during its annual investor meeting as it reported a 43 per cent tumble in profits for the holiday quarter, reflecting the ongoing challenges of balancing more cautious consumer spending and rising costs.

The Republican-controlled U.S. House votes on Tuesday on a bill to block President Joe Biden’s administration from allowing retirement plans to consider environmental, social and corporate governance, or ESG, issues in their investment decisions.

Republicans expect to adopt the measure in a late afternoon House of Representatives vote, and could have enough Senate support to send it on to Biden, a Democrat who the White House has said would veto the bill that would block his own Labor Department from enforcing a new ESG rule.

Goldman Sachs mulls ‘strategic alternatives’ for consumer business “Sometimes we fall short. Sometimes we don’t execute,” Goldman’s boss David Solomon told investors at the company’s New York headquarters.


European shares slipped on Tuesday after data from France and Spain pointed to inflation being stickier than feared, but still ended their second straight month higher supported by sharp gains in rate-sensitive banking stocks.

The continent-wide STOXX 600 index slipped 0.3 per cent, after closing sharply higher in the previous session.

“Whether it be Spain, France or Germany, the European Central Bank has to basically take into account stickier inflation because you’re talking about three out of four of the biggest economies in Europe,” said Michael Hewson, chief market analyst at CMC Markets UK.

Higher food prices pushed the 12-month inflation rate in France to 7.2 per cent in February from 7.0 per cent in the preceding month.

In Spain, consumer prices rose 6.1 per cent year-on-year in February, over a 5.9 per cent rise in the 12 months to January.

Investors are expecting the ECB to hike interest rates by 50 basis points in its upcoming March meeting, taking the benchmark rate to 3 per cent. Rates are expected to hit a peak of 4 per cent in July.

All eyes are now on preliminary euro area wide consumer price inflation data for February due on Thursday.