Markets Overview

  • ASX SPI 200 futures up 0.4% to 7,943.00
  • Dow Average up 0.5% to 40,743.33
  • Aussie down 0.2% to 0.6537 per US$
  • US 10-year yield fell 3.7bps to 4.1375%
  • Australia 3-year bond yield rose 1 bp to 3.98%
  • Australia 10-year bond yield rose 0.4 bps to 4.28%
  • Gold spot up 1.1% to $2,410.52
  • Brent futures down 0.9% to $79.03/bbl

Economic Events

  • 11:30: (AU) June Private Sector Credit YoY, prior 5.2%
  • 11:30: (AU) 2Q Retail Sales Ex Inflation QoQ, est. -0.2%, prior -0.4%
  • 11:30: (AU) 2Q CPI Weighted Median QoQ, est. 1.0%, prior 1.1%
  • 11:30: (AU) 2Q CPI Weighted Median YoY, est. 4.3%, prior 4.4%
  • 11:30: (AU) 2Q CPI Trimmed Mean QoQ, est. 1.0%, prior 1.0%
  • 11:30: (AU) 2Q CPI Trimmed Mean YoY, est. 4.0%, prior 4.0%
  • 11:30: (AU) June Private Sector Credit MoM, est. 0.4%, prior 0.4%
  • 11:30: (AU) June CPI Trimmed Mean YoY, prior 4.4%
  • 11:30: (AU) June Retail Sales MoM, est. 0.2%, prior 0.6%
  • 11:30: (AU) 2Q CPI QoQ, est. 1.0%, prior 1.0%

Stocks in Japan are set to decline as the nation’s central bank kicks off a closely watched series of global policy meetings. The world’s largest technology companies extended losses in late US hours on concerns the artificial-intelligence frenzy might have gone too far.

Equity futures pointed to a drop of more than 1% in Tokyo, while those for Hong Kong were little changed and Sydney was set for a slight gain. In the US, a $280 billion exchange-traded fund tracking the Nasdaq 100 was hit as Microsoft Corp. plunged amid slower cloud growth. That sets the scene for earnings from other tech heavyweights as markets also gear up for monetary policy decisions from the Bank of Japan, the Federal Reserve and the Bank of England.

Bank of Japan board members will discuss raising interest rates to around 0.25% on Wednesday from the current range of 0 to 0.1%, public broadcaster NHK reported, without identifying sources. The yen edged higher against the US dollar in early trading, extending Tuesday’s gain.

Bonds and gold climbed Tuesday amid a renewed flare-up in geopolitical risks as Israel’s military struck Beirut, aiming at a Hezbollah commander. Oil rose 0.7% early Wednesday.

A rotation out of big tech has dragged the Nasdaq 100 down 9% from its all-time high — leaving it on the cusp of a correction. The shift into cyclical pockets of the market began in earnest after signs of cooling inflation stoked bets the Fed will cut rates in September.

“If the Fed does not signal a September rate cut, markets could get a bit ugly given recent tech weakness — especially if earnings underwhelm,” said Tom Essaye at The Sevens Report.

The S&P 500 fell to around 5,435 on Tuesday. The Nasdaq 100 slid 1.4%. A gauge of the “Magnificent Seven” megacaps sank 2%. The Russell 2000 of small firms rose 0.3%. Nvidia Corp. tumbled 7%, wiping $193 billion from its market value.

Other News

Australian airline Rex has entered into voluntary administration, the second domestic airline to fail this year in a market dominated by Qantas Airways Ltd.

Regional Express Holdings Ltd., as Rex is formally known, has appointed Ernst & Young as administrators, according to a statement on Tuesday. Domestic flights on Rex’s fleet of Boeing Co. 737 jets have been canceled, with passengers affected being contacted by the airline, according to the statement. Regional flights operated using Saab 340 aircraft are unaffected and will continue to operate.

Rex, which mostly serves regional and remote towns, had more recently started flights between major cities such as Sydney and Melbourne in a direct challenge to Qantas and Virgin Australia Airlines Pty. Bloomberg News reported earlier that Rex was set to enter administration.

Rex passengers with existing bookings on 13 routes can seek a free transfer to Virgin Australia by Aug. 14, according to the statement. Eligible passengers will be accommodated on Virgin Australia flights as close as practicable to their original time of travel, Rex said in the statement.

(Bloomberg)