ASX tipped to slide; $A dips to two-week low


  • Wall Street’s major indices finished lower again amid a rise in weekly jobless claims, surging virus numbers, and fading hopes more fiscal aid will be delivered before the US election
  • SPI futures are down 0.2% and suggest the ASX 200 will retreat from its seven-month high on Friday
  • The Aussie dollar fell to a two-week low US70.56 cents overnight. It was worth US70.92 cents by 8.30am AEDT
  • Victoria has reported just two new coronavirus cases and zero deaths. The rolling 14 day average is down in metro Melbourne and stable in regional Victoria

Latest updates

Markets watch

ASX futures down 13 points, or 0.2 per cent, to 6186 at 8.30am AEDT

  • AUD at 70.94 US cents (overnight low of 70.56 US cents)
  • Wall Street: Dow -0.1%, S&P500 -0.2%, Nasdaq -0.5%
  • Spot gold +0.3% to $US1906.83 an ounce
  • Brent crude -0.3% to $US43.19 a barrel
  • US oil -0.1% to $US41.00 a barrel
  • Iron ore -0.7% to $US118.70 per tonne
  • 10-year yield: US 0.73% Australia 0.76% Germany -0.61%

Wall Street wrap:

By Noel Randewich

The S&P 500 ended lower overnight after a rise in weekly jobless claims compounded worries about a stalling economic recovery and fading hopes for more fiscal aid before the election.

The number of Americans filing new claims for jobless benefits rose to a two-month high last week, stoking fears the COVID-19 pandemic was inflicting lasting damage to the labour market.

Shares slipped in New York.
Shares slipped in New York.Credit:AP

A separate report showed manufacturing activity in New York State fell more than expected in October.

“Going into the fall it will be difficult for unemployment to make a lot of positive headway because of the lack of stimulus,” said Christopher C. Grisanti, chief equity strategist, MAI Capital Management in Cleveland.

US President Donald Trump said he is willing to raise his offer of $US1.8 trillion for a COVID-19 relief deal with Democrats in Congress, but the idea was shot down by his fellow Republican, Senate Majority Leader Mitch McConnell.

The CBOE volatility index, investors’ fear gauge, hit a one-week high and Wall Street’s indexes dipped for the third straight day. The S&P 500 is down about 3 per cent from its September 2 record high close.

With less than 20 days until the November 3 election, Trump and Democratic challenger Joe Biden are set to hold duelling prime-time town halls on Thursday instead of their second presidential debate, which was cancelled after Trump declined to take part in a virtual matchup.

“More of what moves the market will be the crystallizing of who is going to win the presidency, and how close the Senate races are,” said Tom Martin, senior portfolio manager at Globalt Investments in Atlanta.

A Biden presidency, coupled with a Democratic Senate, would likely mean a larger fiscal stimulus plan than what a Republicans Senate would agree to. However, Biden is also widely seen on Wall Street as likely to raise taxes.

Supporting the Dow Jones Industrial Average, Walgreens Boots Alliance Inc surged 4.8 per cent as the drugstore chain forecast single-digit profit growth in 2021 after reporting a better-than-expected fourth-quarter profit.

Focus is also on the quarterly results for corporate America, with expectations for third-quarter earnings improving to a 19 per cent drop from a 25 per cent tumble forecast on July 1, according to Refinitiv IBES data.

The Dow Jones Industrial Average fell 0.07 per cent to end at 28,494.2 points, while the S&P 500 lost 0.15 per cent to 3,483.34.

The Nasdaq Composite dropped 0.47 per cent to 11,713.87.

Morgan Stanley rose 1.3 per cent after it beat third-quarter profit estimates, winding up mixed results from major US lenders. Recent bank earnings reports saw those focused on trading clocking big gains, while retail banks took a hit from the COVID-19 pandemic.

Good morning (and TGIF)

Folks, we’re nearly there. It’s Friday morning and the Markets Live team can smell the weekend on the breeze.

Alex Druce will be guiding you through today’s news. Futures are tipping a weak open for the ASX as mounting virus cases and stalled stimulus talks weigh on global sentiment.

As always, make sure you drop us a line in the comments if you spot something interesting, or if you’ve got a question about a topic we’re reporting on.

This blog is not intended as financial advice

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