Markets Overview
- ASX SPI 200 futures little changed at 8,040.00
- Dow Average up 0.2% to 41,240.52
- Aussie down 0.4% to 0.6771 per US$
- US 10-year yield rose 1.9bps to 3.8179%
- Australia 3-year bond yield fell 9.7 bps to 3.45%
- Australia 10-year bond yield fell 6.5 bps to 3.85%
- Gold spot up 0.2% to $2,518.21
- Brent futures up 2.8% to $81.24/bbl
Economic Events
- 11:00: (AU) Australia to Sell A$100M 0.25% 2032 Inflation-Linked Bonds
Asian equities are poised to come under pressure Tuesday after technology stocks dragged down Wall Street as traders repositioned ahead of Nvidia Corp.’s earnings later this week.
Equity futures fell in Japan and Hong Kong, while those for Australia were little changed. In the US, some of the world’s largest technology names pushed stocks lower after a rally that put the market on the brink of its all-time highs. Contracts for US shares edged lower in early Asian trading.
A gauge of the “Magnificent Seven” megacaps slid 1.2% on Monday. While more than half of the shares in the S&P 500 gained, the US equity benchmark edged lower — a consequence of weakness in the tech giants that dominate it. PDD Holdings Inc.’s shares fell the most since 2022 in New York after Temu’s owner warned on revenue growth.
Expectations heading into Nvidia’s earnings on Wednesday are high, with analysts anticipating another strong consensus beat that could prompt the chipmaker to raise its profit guidance. The results may provide further clarity on artificial intelligence demand, with Nvidia being the direct beneficiary of the intense spending by companies building out AI infrastructure.
“Move over Powell – it’s Jensen Huang’s turn to move markets,” said Anthony Saglimbene at Ameriprise, referring to Nvidia’s chief. “In our view, Nvidia’s earnings report this week may actually have more impact on the overall market than Powell’s Jackson Hole speech last week.”
Treasury 10-year yields rose two basis points to 3.82% on Monday, while the dollar strengthened as markets monitored the extent to which the Federal Reserve is likely to cut interest rates next month. Fed Bank of San Francisco President Mary Daly said it’s appropriate to begin cutting rates, while her Richmond counterpart Thomas Barkin said he still saw upside risks for inflation, though he supported “dialing down” rates.
US inflation figures this week will reinforce that long-awaited rate cuts are coming soon, while a reading on consumer spending is seen indicating that the central bank has been successful at keeping the expansion intact.
Economists see the personal consumption expenditures price index excluding food and energy — the Fed’s preferred measure of underlying inflation — rising 0.2% in July for a second month. That would pull the three-month annualized rate of so-called core inflation down to 2.1%, a smidgen above the central bank’s 2% goal.
