ASX set for slow start after Nvidia weighs on Wall Street; $A jumps
By Stan Choe
The Australian sharemarket is set for a lacklustre start this morning as a slide for market superstar Nvidia helped pull US stock indexes down from their records.
ASX futures were largely flat, edging up 3 points, or less than 0.1 per cent, to 8447 as of 7.59am AEDT. The ASX inched higher on Monday.
The S&P 500 fell 0.6 per cent overnight in New York, coming off its 57th all-time high of the year so far. The Dow Jones Industrial Average fell 0.5 per cent, and the Nasdaq composite dropped 0.6 per cent from its own record.
Nvidia’s woes sent Wall Street lower.Credit: AP
Investors will look with interest to News Corp’s shares after news broke this morning that Rupert Murdoch has failed in his bid to change an irrevocable family trust.
The 96-page sealed ruling from a Nevada probate commissioner on Saturday (US time), which has been obtained by The New York Times, said Murdoch’s attempts to alter the trust, which holds the voting power for both News Corp and Fox News-owner Fox Corp, were done in “bad faith”. The move was an attempt by the 93-year-old to cement his eldest son Lachlan’s control of the family empire after his death and secure their media assets’ conservative positioning.
On Wall Street overnight, Nvidia’s drop of 2.6 per cent was the heaviest weight on the S&P 500 after China said it’s investigating the company over suspected violations of Chinese anti-monopoly laws. Nvidia has skyrocketed to become one of Wall Street’s most valuable companies because its chips are driving much of the world’s move into artificial-intelligence technology. That gives its stock’s movements more sway on the S&P 500 than nearly every other.
Nvidia’s fall overshadowed gains in Hong Kong and for Chinese stocks trading in the United States on hopes that China will deliver more stimulus for the world’s second-largest economy. Roughly half the stocks in the S&P 500 also rose. The Australian dollar also strengthened. It was 0.8 per cent higher at 64.39 US cents at 8.40am AEDT.
The week’s highlight for Wall Street will arrive midweek when the latest updates on inflation arrive. Economists expect Wednesday’s report to show the inflation that US consumers are feeling remained stuck at roughly the same level last month. A separate report on Thursday, meanwhile, could show an acceleration in inflation at the wholesale level.
They’re the last big pieces of data the Federal Reserve will get before its meeting next week on interest rates. The widespread expectation is still that the central bank will cut its main interest rate for the third time this year.
The Fed has been easing its main interest rate from a two-decade high since September to offer more help for the slowing job market, after bringing inflation nearly all the way down to its 2 per cent target. Lower interest rates can ease the brakes off the economy, but they can also offer more fuel for inflation.
Expectations for a series of cuts from the Fed have been a major reason the S&P 500 has set so many all-time highs this year.
On Wall Street, Interpublic Group rose 7.6 per cent after rival Omnicom said it would buy the marketing and communications firm in an all-stock deal. The pair had a combined revenue of $US25.6 billion last year. Omnicom, meanwhile, sank 8.4 per cent.
Macy’s climbed 2 per cent after an activist investor, Barington Capital Group, called on the retailer to buy back at least $US2 billion of its own stock over the next three years and make other moves to help boost its stock price.
Super Micro Computer rose 5.6 per cent after saying it got an extension that will keep its stock listed on the Nasdaq through Feb. 25, as it works to file its delayed annual report and other required financial statements.
Earlier this month, the maker of servers used in artificial-intelligence technology said an investigation found no evidence of misconduct by its management or by the company’s board following the resignation of its public auditor.
In the oil market, a barrel of benchmark US crude rallied 2 per cent to $US68.53 following the overthrow of Syrian leader Bashar Assad, who sought asylum in Moscow after rebels. Brent crude, the international standard, rose 1.1 per cent to $US71.91 a barrel.
The price of gold also rose 1 per cent amid the uncertainty created by the end of the Assad family’s 50 years of iron rule.
In other international markets, the Hang Seng jumped 2.8 per cent in Hong Kong after top Chinese leaders agreed on a “moderately loose” monetary policy for the world’s second-largest economy. That’s a shift away from a more cautious, “prudent” stance for the first time in 10 years. A major planning meeting later this week could also bring more stimulus for the Chinese economy.
US-listed stocks of several Chinese companies climbed, such as a 12.4 per cent jump for electric-vehicle company Nio and a 7.5 per cent rise for Alibaba Group. Stocks in Shanghai, though, were roughly flat.
In Seoul, South Korea’s Kospi slumped 2.8 per cent as the fallout continues from President Yoon Suk Yeol ’s brief declaration of martial law last week in the midst of a budget dispute.
In the bond market, the yield on the 10-year Treasury rose to 4.20 per cent from 4.15 per cent late Friday.
AP
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