Markets Overview

  • ASX SPI 200 futures down 0.4% to 7,522.00
  • Dow Average down 0.6% to 37,336.60
  • Aussie down 0.3% to 0.6745 per US$
  • U.S. 10-year yield fell 5.4bps to 3.8771%
  • Australia 3-year bond yield fell 5.9 bps to 3.71%
  • Australia 10-year bond yield fell 6.3 bps to 4.05%
  • Gold spot down 0.4% to $2,032.11
  • Brent futures up 0.2% to $79.41/bbl

Economic Events

High-flying stocks reversed course Wednesday after Wall Street warned of a pullback on the rally ignited by the Federal Reserve’s pivot last week.

The Nasdaq 100 ended the day down 1.5% as the tech-heavy benchmark drew back from its latest all-time high. The S&P 500 fell at a similar pace. Relative strength readings on the gauges had been trading at levels typically seen before a decline. Wall Street’s fear gauge — the VIX — also rose sharply, it has been trading near multi-year lows.

Treasuries powered ahead with the yield on the policy-sensitive two-year notching an eight basis point move, the 10-year rate fell to 3.9%. British 10-year debt led the global bond rally following data showing a slowdown in UK inflation.

Traders digested data showing US consumer confidence in December rose by the most since early 2021 on Wednesday. The second-straight monthly increase showed Americans were less concerned about a recession, but economists are still keeping a wary eye on the jobs market.

Separately, sales of previously owned US homes edged higher in November off of a 13-year low, according to a National Association of Realtors report, earlier data showed mortgage rates fell to their lowest since June.

Expect more strength next year as the labor market remains solid and conviction about Federal Reserve rate cuts rises, according to some of Wall Street’s biggest bulls heading into 2024.

Other News

Airbnb admitted in Australian court that it had made “false or misleading representations,” charging customers in U.S. currency instead of Australian dollars.

An Australian court on Wednesday ordered Airbnb to pay a fine of 15 million Australian dollars for misleading customers by not clearly showing that prices for its property rentals were listed in U.S. dollars, instead of Australian dollars, which are worth less.

Airbnb admitted in the Federal Court of Australia that it had made “false or misleading representations” to about 63,000 customers who had used the accommodations-booking platform between January 2018 and August 2021.

In addition to the fine of 15 million Australian dollars (or about $10 million), Airbnb will provide up to another 15 million Australian dollars in compensation to the affected customers, who had made more than 70,000 bookings paid in U.S. dollars.

Gina Cass-Gottlieb, the chair of the Australian Competition and Consumer Commission, a government regulatory agency, said in a statement that customers had reasonably assumed that the prices were in Australian dollars because “they were on Airbnb’s Australian website, searching for accommodation in Australia and seeing a dollar sign.

“By paying in U.S. dollars, these consumers were charged more than they expected to pay, and were deprived of a chance to make an informed decision about whether to make the booking because of this misleading conduct regarding the price,” the statement continued.

Airbnb will contact customers who are eligible for compensation by Feb. 5, 2024, according to the commission. The agency initiated proceedings against Airbnb in June 2022.

Susan Wheeldon, Airbnb’s country manager for Australia and New Zealand, said in a statement that the company fixed how it showed currencies after the problem in Australia was raised.

“While only a very small percentage of Australian guests are believed to have been impacted, we are disappointed that this happened,” Ms. Wheeldon said. “Airbnb would like to apologize to those guests.”

About 2,088 customers complained to Airbnb customer support about being charged in U.S. dollars, according to the court ruling. Some were told by Airbnb customer support that they had chosen to see prices in U.S. currency, even though they had not, the ruling said.

Some of the customers had also been charged fees by their banks for paying in U.S. dollars, the ruling said.

Justice Brendan McElwaine of the Federal Court of Australia said in the ruling that the lack of clarity about the currency was “not the result of deliberate conduct, designed to intentionally mislead.”

The Airbnb platform should have defaulted to Australian currency for people using it in Australia, the ruling said, but there were “bugs and/or edge cases” that caused the system to inaccurately identify some users as being located in the United States.

The court ruling said that Airbnb changed the platform in August 2021 to use the “USD” abbreviation when U.S. dollars are the applicable currency.

(New York Times)