AU Morning Wrap: ASX Rises Ahead of Inflation Data; Rio Rallies on Results
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• The S&P 500 fell Tuesday, dragged lower by declines in megacap tech stocks, as investors braced for quarterly reports from names in that cohort. Traders also set their eyes on Washington as the Federal Reserve began its latest policy meeting.
• Australian shares opened higher before the key June quarter inflation data to gauge whether further tightening from the Reserve Bank will be needed.
• Stocks to watch: RIO, ORG, REX
Wall Street Summary
The markets sold off Tuesday, with heavy moving average volume red candles across the indexes. After the 4 pm ET close, the $S&P 500 Index(.SPX.US$ fell 0.5%, the $Dow Jones Industrial Average(.DJI.US$ climbed 0.5%, and $Nasdaq Composite Index(.IXIC.US$ fell 1.28%.
Consumer sentiment numbers from CB came in at 100.3 vs 99.7 expected. Last month, they reported 97.8. JOLT's job opening numbers also came out at 8.184M vs 8.020M expected. Last month, JOLTS reported 8.230M.
This week, all eyes are on the FOMC, due to report its current strategy for competing inflation on Wednesday. The futures market shows investors are pricing in a rate cut in September after the PCE data released Friday showed a slight dip month over month in price inflation.
Investors can watch for PMI data on Thursday and Nonfarm monthly payroll employment data on Friday.
AU Market Watch
Australian shares opened higher ahead of the key June quarter inflation data, which will help determine if further tightening from the Reserve Bank is necessary.
The benchmark $S&P/ASX 200(.XJO.AU$ Index rose 0.5%, or 36.8 points, to 7990 at the start of trading, despite a mixed session on Wall Street overnight.
Local investors are keenly awaiting the June quarter consumer price index release at 11:30 a.m. AEST, which is considered crucial in determining whether the RBA will raise rates again to 4.6%. Bond traders currently estimate around a 20% chance of a rate increase by the RBA next week.
The key framing for the data is whether inflation will be strong enough for their RBA to lose confidence in the outlook for inflation to return to target in 2026," NAB economists wrote in a note. "The recent RBA Minutes gave a clear nod to the CPI and the board had debated the case for hiking at the two prior meetings."
Commodity
Gold prices gained around 1% on Tuesday as investors remained optimistic that the U.S. Federal Reserve could drop clues about lowering interest rates in September at the end of the policy meeting this week.
Europe is showing some more cracks within its economy and they are set to cut rates in September and U.S. is expected to cut rates as well, that has supported the gold market," said Phillip Streible, chief market strategist at Blue Line Futures.
Crypto
As of latest data, $Bitcoin(BTC.CC$ is priced at $66,844, down by 3.87% in the past 24 hours, while $Ethereum(ETH.CC$ is priced at $3,339, down by 1.23% in the past 24 hours.
Stocks to Watch
$Rio Tinto Ltd(RIO.AU$ rose 0.9% after reporting a half-year profit after tax of $5.8 billion. The mining giant posted underlying earnings before interest, taxes, depreciation, and amortization (EBITDA) of $12.1 billion and net cash of $7.1 billion. It also declared an interim ordinary dividend of US$1.77 per share.
$Origin Energy Ltd(ORG.AU$ dropped 1.7%, despite its revenue from Australia Pacific LNG increasing by 2% to $2.6 billion in the June quarter. However, its revenue for FY24 was 12% lower than FY23, with the company attributing the decline to lower commodity prices.
$Regional Express Holdings Ltd(REX.AU$ has entered voluntary administration. Rex Airlines flights between major airports have been canceled, and the company's domestic fleet of Boeing 737 aircraft has been grounded.
Economic Calendar (AEST)
11:30 am: Australia Monthly CPI Indicator (Jun)
11:30 am: China NBS Manufacturing and Services PMI (Jul)
2:00 pm: BoJ Interest Rate Decision
4:45 pm: France Inflation Rate (Jul)
7:00 pm Eurozone Inflation Rate (Jul)
4:00 am: Fed Interest Rate Decision
Source: Dow Jones Newswires, AFR
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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104476495 : hi
onthefence : s&p fell yesterday, but IVV up 1% today.