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On Wall Street, all 11 of the S&P 500’s industry sectors closed down, paced by utilities. The VIX rose 4.1 per cent to 13.44.
The European Central Bank hosts its annual conference in Sintra, Portugal this week with Christine Lagarde, Jerome Powell, Andrew Bailey and Kazuo Ueda set to participate in a group panel on Wednesday.
The gathering follows last week’s rate rises in the UK and Norway among others. In a note, Bank of America cited eight rises around the world this month.
In addition, there have been 88 global rate rises so far this calendar year and 470 of them in the past two years, BofA said. It noted that while emerging markets have pivoted to rate cuts, developed markets are “pivoting back to hikes”.
And with an extended rate-rising cycle, recession chatter has flared again, globally and here in Australia too.
Today’s agenda
No local data
Overseas data: German June business climate survey; US June Dallas Fed index
Other top stories
Allegro to pay just $1 to save PwC’s government business: About 130 PwC partners and about 1750 staff from the firm’s embattled government consulting arm will join a new company codenamed Bell under the cut-price deal.
The weekend that shook Putin’s Russia to its foundations: Wagner boss Yevgeny Prigozhin’s quixotic mutiny has fallen apart, but has left indelible doubts over Putin’s authority and his ability to prosecute the war.
Luxury rules: Farr-Jones shrugs off recession talk: Regal Funds Management portfolio manager Jessica Farr-Jones is betting on the luxury goods sector even as most pundits prepare for a market sell-off.
Market highlights
ASX futures down 16 points or 0.23% to 7043 near 8am AEST
- AUD -1.1% to 66.80 US cents
- On Wall St: Dow -0.7% S&P -0.8% Nasdaq -1%
- In New York: BHP -2.6% Rio -2.5% Atlassian -4.4%
- Tesla -3% Apple -0.2% Amazon -0.6% Meta +1.4%
- Stoxx 50 -0.8% FTSE -0.5% CAC -0.6% DAX -1%
- Spot gold +0.4% to $US1921.21/oz in New York
- Brent crude -0.4% to $US73.85/barrel in New York
- Iron ore -2.3% to $US109.15 a tonne
- 10-year yield: US 3.73% Australia 3.99% Germany 2.35%
United States
JPMorgan Chase & Co is cutting about 40 investment bankers in North America, as the Wall Street giant adds to international reductions amid a dealmaking slowdown.
The latest cuts span all levels of seniority, according to Bloomberg. The bank eliminated about 20 investment-banking jobs in Asia last week, on top of a prior round affecting the region.
Separately Goldman Sachs Group has started cutting managing directors across the globe as the firm reduces its headcount amid a deals slump, Bloomberg also reported. About 125 managing directors, including some in investment banking, will lose their jobs.
Eli Lilly & Co’s experimental weight-loss pill helped patients shed pounds quickly in a mid-stage trial, setting the stage for competition to heat up with rivals such as Novo Nordisk that make obesity drugs.
Lilly’s oral drug, orforglipron, produced an average loss of about 15 per cent of a person’s body weight in 36 weeks when given daily at the highest dose to adults with obesity, according to a mid-stage study published in the New England Journal of Medicine.
Commodities
TD Securities said it is betting that copper will fall. “We initiate a tactical short in LME one-month copper, in line with our view that copper’s stimulus-relief rally is overdone, as prices have remained resilient despite fast-slumping demand expectations.
“In our view, critically low visible inventories have provided an offset for the time being, but the end of a particularly packed maintenance season for Chinese copper smelters should see the nearly 1.8mtpa of offline capacity begin to return over the coming weeks, supporting refined metal supply.
“A notable premium associated with Chinese optimism remains embedded within prices, but participants could be in for an unpleasant surprise as officials refrain from stoking leverage.”
Goldman Sachs on oil’s retreat to its average pre-Russia’s war against Ukraine: ”
“Supply has adjusted to the first half 2022 rally, largely through supply beats from sanctioned economies which are unlikely to reverse, supports our view that oil prices will likely not rebound to their 2022 highs over the next year.
“At the same time, the insight that [US strategic petroleum reserve] policy and US shale supply should turn from headwinds into tailwinds supports our constructive call on oil prices in 2023H2, with our December forecast at $US86/bbl given sizeable second-half deficits.”
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