1 week Ago By Stephen Culp
The Australian sharemarket faces a muted start after Wall Street made a choppy start to the new year, with US investors working through the implications of latest economic data, a rising US dollar and tumbling Tesla shares. ASX futures were down 0.2 per cent, after the local sharemarket notched a winning session on Thursday buoyed by mining and energy stocks.
The market will keep an eye on the Australian dollar, which continues to hover near a two-year low of 62 US cents. The Australian sharemarket has started the new year on a positive note. Credit: Dominic Lorrimer Overnight, all three major US stocks ended the session in negative territory, a reversal of an earlier rally but off session lows.
“We had some macro news but somewhat mixed, and you know we have a very strong US dollar today,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “There are a few hurdles over the next couple of weeks and those are next Friday’s employment data and the beginning of fourth-quarter earnings.” “In the short term, we’re looking at choppiness and a struggle for direction until we get those hurdles out of the way.
” Shares of Tesla sank 6.1 per cent after the company reported its first annual drop in deliveries, as incentives failed to stem a decline in demand for its ageing line-up of electric vehicles. Tesla has reported its first annual drop in deliveries.
Credit: Bloomberg A report from the US Labor Department showed initial and continuing claims for unemployment benefits both fell last week, supporting the narrative of a solid jobs market and adding weight to the possibility that the US central bank could let its key interest rate stand at this month’s policy meeting. Looking past uncertainties regarding the pace of interest rate cuts from the Federal Reserve, the policies of the coming Trump administration and various hot spots of geopolitical unrest, market participants chose to focus on the strength of the United States economy. Wall Street’s main indexes notched double-digit gains in 2024, with the benchmark S&P 500 recording its best two-year run since 1997-98.
Those gains were driven by the US Federal Reserve’s first rate cuts in 31⁄2 years, the ongoing artificial intelligence boom and expectations of pro-business policies under the Trump administration. The rally lost steam in the closing weeks of 2024, with the S&P 500 and the Dow marking declines for December, as markets priced in the likelihood of fewer rate cuts from the Fed this year. The S&P and the Nasdaq have now posted five consecutive sessions in the red, their longest losing streaks since mid-April.
The Dow Jones Industrial Average fell 151.95 points, or 0.36 per cent, to 42,392.
27, the S&P 500 lost 13.08 points, or 0.22 per cent, to 5868.
55, and the Nasdaq Composite lost 30 points, or 0.16 per cent, to 19,280.79.
Among the 11 major sectors of the S&P 500, consumer discretionary stocks were down the most, weighed by Tesla. Energy shares, buoyed by rising crude prices, enjoyed the largest percentage gains. Apple lost 2.
6 per cent as the iPhone maker offered rare discounts in China to compete against domestic rivals. Crypto stocks such as Coinbase, MicroStrategy and MARA Holdings gained between 2.6 per cent and 3.
6 per cent, tracking rising Bitcoin prices. Reuters.
