US equities fell on Tuesday as investors await Fed Chair Jerome Powell’s two day testimony before Congress this week.
United States
The S&P500 fell -1.02% in broad-based selling with most sectors lower and 70.4% of stocks closing down. The Dow Jones was also -1.04% weaker, along with the Nasdaq Composite -1.65% and Russell 2000 -0.99% with the VIX jumping 7.19% to 14.46. In economic data, the ISM services report for February was modestly below expectations at 52.6 but remained firmly at expansionary levels, although decelerating from 53.4 previously. Among Fed speakers, Atlanta Fed President Raphael Bostic said he expects the first rate cuts in 2024 to come in the third quarter, followed by a pause allowing more time for policymakers to assess how the economy is progressing.
Europe
European equities were mostly lower on Tuesday with little economic data to guide investors, with an ECB rate decision in focus later this week. The Euro Stoxx 600 closed -0.23% lower along with DAX -0.10% and CAC -0.3% while the FTSE100 edged up 0.08%. Tonight, the only notable release is Eurozone retail sales for the 12 months to January, expected to show a -1.3% drop.
The ASX is expected to open weaker this morning with ASX200 futures down -10 points or -0.13% to 7,690. The index edged -0.15% lower amid mixed sector performance with materials and healthcare up 0.56% and 1.0% respectively while consumer discretionary leading losses down -1.21%. Gold miners were a notable performer as the precious metal climbed towards a record high with St. Barbara up 12.5%, Regis Resources up 5.5% and Ramelius Resources gaining 4.3%. Elsewhere, shares in Iress climbed 12.5% in the final minutes of trading after an article in the Australian Financial Review that Private Equity firm Thoma Bravo was potentially interested in a bid for the fintech. In economic data today, GDP for Q4 2023 is due to be released at 11:30 AEDT
Commodities
In commodities oil prices finished lower with both WTI and Brent crude down -0.71% and -0.92% respectively. Iron ore futures in Singapore are -0.34% lower this morning following a -1.02% drop on Tuesday to US$114 with copper also -0.21% lower. Gold has extended a streak of five sessions higher, up a further 0.73% overnight to US$2,129 touching a new record high while silver is -0.85% lower along with Bitcoin -8.16%.
Economic Calendar
6th March 2024
Australian GDP (YoY Q4) 11:30
Eurozone Retail Sales (YoY Jan) 21:00
US ADP Employment (MoM Feb) 00:15
BOC Rate Decision 01:45
Fed Chair Powell Testimony 02:00
This article was written by James Woods, Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
