Markets Overview
- ASX SPI 200 futures down 0.1% to 8,350.00
- Dow Average little changed at 43,230.00
- Aussie down 0.5% to 0.6497 per US$
- US 10-year yield little changed at 4.4041%
- Australia 3-year bond yield fell 0.2 bps to 4.08%
- Australia 10-year bond yield fell 0.5 bps to 4.56%
- Gold spot up 0.7% to $2,651.06
- Brent futures down 0.5% to $72.95/bbl
Economic Events
- 10:30: (AU) Australia to Sell A$1 Billion 84-Day Bills
- 10:30: (AU) Australia to Sell A$1 Billion 140-Day Bills
- 19:00: (AU) RBA’s Bullock-Speech
Big tech edged lower in afterhours trading following a disappointing revenue forecast from Nvidia Corp.
An exchange-traded fund tracking the Nasdaq 100 (QQQ) slipped 0.2% while shares of the world’s most valuable company fell 1.7% in late trading after its outlook failed to meet expectations. The forecast was offset by signs of demand for the company’s newest product line, Blackwell.
US stocks had struggled to find footing in the run up to the results with the latest Ukraine-Russia tensions also weighing on sentiment. The S&P 500 ended the day little changed, as did the Nasdaq 100, while the dollar strengthened. The technology-heavy gauge had fallen more than 1% intraday following Ukraine’s missile strikes on Russia.
Treasuries fell across the curve after an auction of 20-year bonds received a lukewarm reception, adding to the cautious tone on Wall Street.
Trading in options signaled Nvidia results were the most important catalyst left this year — more than the Federal Reserve’s December meeting, according to Barclays Plc strategists. Its stock price has nearly tripled in 2024.
Nvidia’s swings often bleed through to smaller stocks, according to Bespoke Investment Group.
“Since the end of May, there has been a tendency for the Russell 2000 to perform poorly when NVDA has surged as it sucks all the capital from the pool, and vice versa,” the strategists wrote.
To Subitha Subramaniam, chief economist at Sarasin & Partners, the market’s reliance on single stocks to drive benchmarks higher sets off red flags.
“The health of the market being driven by results of individual companies in itself points to a certain element of fragility,” she said. “Is it sufficient that they beat, is it sufficient that they beat by a big margin? We are hanging on every statement of the CEO.”
Bloomberg’s gauge of the dollar advanced 0.4%, rebounding from a three-day drop. US Treasuries struggled to erase losses while Wall Street’s fear gauge, the VIX, advanced for the second day, jumping as much as 15%.
Traders are also monitoring President-elect Donald Trump’s administration picks, especially his selection for the Treasury secretary role. Former Federal Reserve Governor Kevin Warsh and Apollo Global Management’s Marc Rowan are contenders, according to people familiar with the matter. Meanwhile, Trump tapped Cantor Fitzgerald LP Chief Executive Officer Howard Lutnick to lead the Commerce Department, a key role to facilitate his tariff and trade policies.
“As I look at the Treasury secretary race, I want to see exactly who is in that role because the tax policies, the debt limit all come back,” Ed Mills, Washington policy analyst at Raymond James, told Bloomberg Television. “We need to see exactly how that person has a relationship with the Federal Reserve, because monetary policy will quickly figure into all of this.”
Meanwhile, Fed Governor Michelle Bowman said she wants to move cautiously on further interest-rate cuts as progress in reducing inflation has slowed. Swaps traders are betting on slightly better than a 50-50 chance of another rate cut at the US central bank’s Dec. 18 meeting.
Bitcoin set another all-time high, supported by a series of developments highlighting the deepening embrace of the digital-asset industry in the US under crypto cheerleader Trump. The world’s largest cryptocurrency is fast approaching $100,000, helped along by MicroStrategy Inc.’s massive purchases.
