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ASX set to slide as US markets fall; Bitcoin surges

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Miners (down 1.8 per cent) reversed their upwards trajectory from Monday, with gold miner Northern Star (down 4 per cent) and lithium companies Pilbara Minerals (down 8.5 per cent), Allkem (down 3.9 per cent) and IGO (down 6.7 per cent) also declining. Iron ore heavyweights BHP, which lost 1.3 per cent, and Fortescue, which slid 0.9 per cent, also weighed the index.

Consumer discretionary stocks (down 1.2 per cent) were also weaker, with Aristocrat Leisure (down 2.8 per cent), Wesfarmers (down 0.6 per cent) and Lottery Corporation (down 2 per cent) all slipping. Energy companies (down 2.1 per cent) also guided the local bourse lower as heavyweight Woodside shed 2.7 per cent.

The lowdown

IG Australia market analyst Tony Sycamore said the Reserve Bank’s interest rate pause was broadly expected by commentators and markets despite hawkish comments at the November board meeting.

“A string of cooler-than-expected data last week across house prices, retail sales and inflation suggests the RBA’s 13 rate hikes between May 2022 and November 2023 are having the desired effect,” he said.

Sycamore said the ASX bounced slightly after the Reserve Bank’s decision but that it remained lower throughout the day. “We think the ASX 200 can revisit the 200-day moving average at 7161 in the coming weeks.”

Wall Street gave back some of its recent gains as stocks finished lower ahead of some key reports this week on the job market that might provide more insight into the Federal Reserve’s thinking about interest rates.

The S&P 500 closed 0.5 per cent lower. The benchmark index was coming off its best month in more than a year, and reached its highest level in more than a year on Friday.

The Dow Jones Industrial Average slipped 0.1 per cent, while the Nasdaq composite dropped 0.8 per cent.

Bitcoin continued to surge higher. It has added another 11 per cent so far in December to trade at its highest since the market began to implode in April 2022. It was 5.5 per cent higher at $US41,870 on Bitstamp at 8.48am AEDT.

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Treasury yields rose broadly, putting some pressure on stocks. The yield on the 10-year Treasury, which influences mortgage rates, climbed to 4.25 per cent from 4.21 per cent late Friday.

Technology and communication services companies were the biggest weights on the market. Microsoft fell 1.4 per cent, Nvidia dropped 2.7 per cent, Meta Platforms slid 1.5 per cent and Netflix lost 2.5 per cent.

Alaska Air Group slumped 14.2 per cent after announcing it will buy Hawaiian Airlines in a $US1.9 billion ($2.9 billion) deal, including the assumption of debt, a tie-up that would test the Biden administration as it fights consolidation in the airline sector.

Spotify surged 7.5 per cent after announcing its third round of layoffs this year. Uber gained 2.2 per cent after the ride-hailing service was named to join the S&P 500 index.

US crude oil prices fell 1.4 per cent. Oil prices have been slipping recently, helping ease pressure on inflation.

Bitcoin has surged through $US40,000.Credit: Getty Images

Wall Street is coming off a solid week and a strong November on hopes that inflation is easing enough to allow the Federal Reserve to stop raising interest rates. Investors are also hoping that the economy remains strong enough to avoid a recession.

Investors will get several key updates on the economy this week, including reports on the services sector and the jobs market.

The Institute for Supply Management will release its November report on the services sector on Tuesday. The sector is a key component in the US economy and accounts for the majority of the nation’s jobs. The report could provide more insight into consumer spending and the jobs market.

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Wall Street will get several reports this week that focus on the broader employment picture in the US The government will release its October update on job openings on Tuesday and a weekly report on applications for unemployment benefits on Thursday.

Investors will be closely watching the government’s monthly jobs report for November, which is on Friday. Analysts polled by FactSet expect US employers to have added 175,000 jobs last month. They forecast that the unemployment rate remained steady at 3.9 per cent.

The labor market has remained strong in the US even as the Fed has raised interest rates sharply in order to fight inflation by slowing the entire economy. Inflation has been falling since the middle of 2022. The central bank paused raising rates after its most recent increase in late July.

Tweet of the day

Quote of the day

“There was no warning,” said Retail and Fast Food Workers Union secretary Josh Cullinan as the union launched legal action against Woolworths on behalf of 1400 workers for allegedly changing rosters without proper consultation and threatening not to pay workers who didn’t comply, resulting in wage cuts in the midst of the pandemic.

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Miners (down 1.8 per cent) reversed their upwards trajectory from Monday, with gold miner Northern Star (down 4 per cent) and lithium companies Pilbara Minerals (down 8.5 per cent), Allkem (down 3.9 per cent) and IGO (down 6.7 per cent) also declining. Iron ore heavyweights BHP, which lost 1.3 per cent, and Fortescue, which slid 0.9 per cent, also weighed the index.

Consumer discretionary stocks (down 1.2 per cent) were also weaker, with Aristocrat Leisure (down 2.8 per cent), Wesfarmers (down 0.6 per cent) and Lottery Corporation (down 2 per cent) all slipping. Energy companies (down 2.1 per cent) also guided the local bourse lower as heavyweight Woodside shed 2.7 per cent.

The lowdown

IG Australia market analyst Tony Sycamore said the Reserve Bank’s interest rate pause was broadly expected by commentators and markets despite hawkish comments at the November board meeting.

“A string of cooler-than-expected data last week across house prices, retail sales and inflation suggests the RBA’s 13 rate hikes between May 2022 and November 2023 are having the desired effect,” he said.

Sycamore said the ASX bounced slightly after the Reserve Bank’s decision but that it remained lower throughout the day. “We think the ASX 200 can revisit the 200-day moving average at 7161 in the coming weeks.”

Wall Street gave back some of its recent gains as stocks finished lower ahead of some key reports this week on the job market that might provide more insight into the Federal Reserve’s thinking about interest rates.

The S&P 500 closed 0.5 per cent lower. The benchmark index was coming off its best month in more than a year, and reached its highest level in more than a year on Friday.

The Dow Jones Industrial Average slipped 0.1 per cent, while the Nasdaq composite dropped 0.8 per cent.

Bitcoin continued to surge higher. It has added another 11 per cent so far in December to trade at its highest since the market began to implode in April 2022. It was 5.5 per cent higher at $US41,870 on Bitstamp at 8.48am AEDT.

Loading

Treasury yields rose broadly, putting some pressure on stocks. The yield on the 10-year Treasury, which influences mortgage rates, climbed to 4.25 per cent from 4.21 per cent late Friday.

Technology and communication services companies were the biggest weights on the market. Microsoft fell 1.4 per cent, Nvidia dropped 2.7 per cent, Meta Platforms slid 1.5 per cent and Netflix lost 2.5 per cent.

Alaska Air Group slumped 14.2 per cent after announcing it will buy Hawaiian Airlines in a $US1.9 billion ($2.9 billion) deal, including the assumption of debt, a tie-up that would test the Biden administration as it fights consolidation in the airline sector.

Spotify surged 7.5 per cent after announcing its third round of layoffs this year. Uber gained 2.2 per cent after the ride-hailing service was named to join the S&P 500 index.

US crude oil prices fell 1.4 per cent. Oil prices have been slipping recently, helping ease pressure on inflation.

Bitcoin has surged through $US40,000.

Bitcoin has surged through $US40,000.Credit: Getty Images

Wall Street is coming off a solid week and a strong November on hopes that inflation is easing enough to allow the Federal Reserve to stop raising interest rates. Investors are also hoping that the economy remains strong enough to avoid a recession.

Investors will get several key updates on the economy this week, including reports on the services sector and the jobs market.

The Institute for Supply Management will release its November report on the services sector on Tuesday. The sector is a key component in the US economy and accounts for the majority of the nation’s jobs. The report could provide more insight into consumer spending and the jobs market.

Loading

Wall Street will get several reports this week that focus on the broader employment picture in the US The government will release its October update on job openings on Tuesday and a weekly report on applications for unemployment benefits on Thursday.

Investors will be closely watching the government’s monthly jobs report for November, which is on Friday. Analysts polled by FactSet expect US employers to have added 175,000 jobs last month. They forecast that the unemployment rate remained steady at 3.9 per cent.

The labor market has remained strong in the US even as the Fed has raised interest rates sharply in order to fight inflation by slowing the entire economy. Inflation has been falling since the middle of 2022. The central bank paused raising rates after its most recent increase in late July.

Tweet of the day

Quote of the day

“There was no warning,” said Retail and Fast Food Workers Union secretary Josh Cullinan as the union launched legal action against Woolworths on behalf of 1400 workers for allegedly changing rosters without proper consultation and threatening not to pay workers who didn’t comply, resulting in wage cuts in the midst of the pandemic.

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