Weighed down by profit-taking across large-cap technology stocks, US equity markets were weaker on Tuesday, with the S&P500 declining 6.26 points or -0.16% to close the trading session at 3,971.27.
United States
Prices continue to trade in and around the 4000 level which over the past week has acted as a significant zone of price resistance. From the S&P500, the energy sector led the gainers, increasing by 1.45%, followed by the industrials and materials sectors, which rallied by 0.54% and 0.50% respectively. Looking at the other major indices, the Dow Jones Industrials dipped -0.12% to close at 32,394.25, with 15/30 stocks closing the day in the red, led by American Express (AXP, -2.40%). The top gainers from the Dow were Walgreens Boots Alliance (WBA) and Boeing (BA), both up over 2%. The Nasdaq100 shed -0.49%. This follows a decent period of out-performance for the Nasdaq100 as compared to the S&P500, highlighting that much of the recent selling has been focused on US financials, and banking stock more specifically.
There remains plenty of economic data out later in the week, including the Feds preferred measure of inflation, which will no doubt play a large part in their decisions on future interest rate hikes. As a reminder, the Fed Fund rate now stands at 5%, following one of the steepest tightening cycles in history.
Europe
European equity markets were slightly firmer on Tuesday, with the German Dax (+0.09%), French CAC40 (+0.14%), and the UK FTSE100 (+0.17%) all closing slightly in the green. This was despite reports that French prosecutors have announced that many large banks, including the likes of Societe Generale and BNP Paribas, face collective fines of over 1 billion Euros relating to tax fraud and money laundering.
*Note: These prices are based on futures and/or CFD pricing and may therefore differ slightly from spot pricing.
Australia
Aussie stocks were stronger on Tuesday, with the ASX200 closing higher by 1.04% at 7,034.09, while ASX SPI200 futures have dipped marginally in overnight trading, down 26 points, suggesting a slightly weaker start to our trading day on Wednesday. On Tuesday, the big gainers from the ASX200 were lithium miner, Liontown Resources (LTR), who received a $2.50 a share bid from US giant Albemarle. The offer, which has been rejected by the board values the company at $5.5 billion and comes after a recent slump in lithium prices. Not surprisingly, this provided a strong big across the lithium sector on Tuesday, with the likes of Core Lithium (CXO), Pilbara Minerals (PLS), Allkem (AKE), and Sayona Mining (SYA) all up over 10%. In other takeover news, United Malt Group (UMG) rallied over 30% after the company received a conditional, non-binding, takeover offer of $5 per share from Malteries Soufflet. The stock traded as high as $4.64 before closing the trading session at $4.50.
Commodities
To commodity markets, and WTI crude oil prices continue to push higher, closing on Tuesday at US$73.20, after trading as low as $66 a barrel over recent weeks. Spot gold prices recovered from recent weakness, closing the day at US$1,973.54 an oz. The US Dollar Index fell 0.40%, with the Euro gaining 0.50% against the Greenback, while the Australian dollar is currently trading at 67.07 US cents.
Economic Data
Wednesday 29th March
Aust: Monthly CPI Indicator (FEB), 11:30 am
Germany: Consumer Confidence (APR), 5:00 pm
Thursday 30th March
US: FED Barr testimony, 1:00 am
Germany: Inflation Rate (MAR), 11:00 pm
US: GDP Growth Rate Final (Q4), 11:30 pm
This article was written by Oliver Gordon, Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
