ASX set to slide as Wall Street falls; Bitcoin surges

By Damian Troise

Stocks slipped on Wall Street 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 was off 0.9 per cent. The index is coming off its best month in more than a year, and reached its highest level in more than a year on Friday.

Wall Street has started the week on the back foot.
Wall Street has started the week on the back foot. Credit: NYSE

The Dow Jones fell 0.4 per cent. The Nasdaq composite fell 1.5 per cent. The Australian sharemarket is set to retreat at the open, with futures at 4.59am AEDT pointing to a fall of 22 points, or 0.3 per cent. The ASX added 0.7 per cent on Monday.

Treasury yields were higher, putting some pressure on stocks. The yield on the 10-year Treasury, which influences mortgage rates, rose to 4.29 per cent from 4.21 per cent.

Technology companies were among the biggest weights on the market. Microsoft fell 2.6 per cent and Apple fell 1.8 per cent.

Spotify surged 7 per cent after announcing its third round of layoffs this year. Uber gained 5.6 per cent after the ride-hailing service was named to join the S&P 500 index.

Alaska Air Group slumped 15.6 per cent after announcing it will buy Hawaiian Airlines in a $US1.9 billion ($2.9 billion) deal, a tie-up that would test the Biden administration as it fights consolidation in the airline sector.

US crude oil prices fell 0.3 per cent. Oil prices have been slipping recently, helping ease pressure on inflation.

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 5.1 per cent higher at $US41,605 on BItsmap at 5.18am AEDT.

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Markets were mixed in Europe and Asia.

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.

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

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.

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 labour 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.

Wall Street expects rates to remain steady into early 2024, when the Fed could begin cutting interest rates back from their highest level in two decades. The Fed’s next decision on rates will follow the close of their next two-day meeting on December 13.

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Source: Thanks smh.com