AU Morning Wrap: ASX Falls as Powell Dashes Hopes for a Rate Pivot in 2023
G'day, mooers! Check out the latest news on today's stock market!
• S&P 500 sinks on Fed hike, Powell signals more to come
• ASX falls at the open as Powell dashes hopes for a rate pivot in 2023
• Stocks to watch: Pilbara Minerals, New Hope, Breville Group
- Moomoo News AU
• S&P 500 sinks on Fed hike, Powell signals more to come
• ASX falls at the open as Powell dashes hopes for a rate pivot in 2023
• Stocks to watch: Pilbara Minerals, New Hope, Breville Group
- Moomoo News AU
Wall Street Summary
US stocks fell in volatile trade after the Fed lifted the target federal funds rate by half a percentage point, as expected, but disappointed the market with a hawkish outlook for next year. The central bank raised its peak rate projection and warned it needed to see inflation to cool significantly before changing its stance.
US stocks fell in volatile trade after the Fed lifted the target federal funds rate by half a percentage point, as expected, but disappointed the market with a hawkish outlook for next year. The central bank raised its peak rate projection and warned it needed to see inflation to cool significantly before changing its stance.
The $S&P 500 Index(.SPX.US$ swung to a loss of 24 points or 0.61 per cent. The $Dow Jones Industrial Average(.DJI.US$ gave up 142 points or 0.42 per cent. The $Nasdaq Composite Index(.IXIC.US$ shed 86 points or 0.76 per cent.
This morning's rate hike was the smallest in five meetings, following four straight raises of three-quarters of a percentage point. The increase lifted benchmark rates to 4.25-4.5 per cent.
What surprised the market was an increase in the bank’s forecast rate top or "terminal rate". The bank projected the target federal funds rate will reach 5.1 per cent next year. Only two members of the Federal Open Market Committee saw benchmark rates staying below 5 per cent. Seven officials saw rates rising as high as 5.75 per cent.
AU Market Watch
Australian shares followed Wall Street lower at the open on Thursday, taking direction from a sharp reversal in New York after the Federal Reserve released its final policy decision of the year and revised its rate and economic projections.
Fed chairman Jerome Powell said officials were not close to ending their aggressive campaign of interest-rate increases.
The $S&P/ASX 200(.XJO.AU$ opened down 0.31 per cent, weighed by declines in the materials, health care. financials, tech and consumer discretionary sectors. Energy and consumer staples rose.
Breville Group led the decliners, falling 7 per cent. Lithium miners Pilbara Minerals, Sayona, Liontown and Core Lithium were also lower.
Coal miners New Hope and Whitehaven gained.
Stocks to Watch
$Pilbara Minerals Ltd(PLS.AU$: Pilbara Minerals has sold two cargoes of spodumene concentrate for an average price of $US7552 per dry metric tonne (dmt) at its latest auction on the digital battery material exchange.
The price was equivalent to $US8299/dmt on a SC6.0 CIF China basis, inclusive of freight costs.
$Woolworths Group Ltd(WOW.AU$: Grocery giant Woolworths Group has agreed to acquire a 55 per cent equity interest in speciality pet food, accessories and services retailer Petspiration Group for a cash consideration of $586 million.
Petspiration is the owner and operator of retail brand PETstock and has a network of 276 stores.
$ASX Ltd(ASX.AU$: ASIC used its powers to issue notices to the ASX requiring a special report on the CHESS clearing and settlement debacle over aspects such as governance, security and reliability. It will be audited by EY.
"This is the first time ASIC has used this delegated power against an operator of licensed market infrastructure for the purposes of auditing the support and maintenance of a clearing and settlement system," the market regulator said.
$AVZ Minerals Ltd(AVZ.AU$: Lithium explorer AVZ Minerals has extended its suspension from sharemarket trade until January 31 or until it can make an earlier announcement to the market.
It says the suspension that has been in place since early May is necessary as it waits for an update on its mining license in the Democratic Republic of Congo. It has not commented on the reasons why it's yet to receive the license.
$Appen Ltd(APX.AU$: Mark Brayan will step down as CEO and managing director of former ASX darling Appen after a difficult year for the artificial intelligence data services company.
Dividends Paid: $ANZ Group Holdings Ltd(ANZ.AU$, $Waterco Ltd(WAT.AU$, $ResMed Inc(RMD.AU$, $Pendal Group Ltd(PDL.AU$, $Liberty Financial Group Ltd(LFG.AU$
Commodities
• Iron ore futures fell 0.3% to US$108.55 a tonne.
• Oil prices extended gains, now up around 8.3% in the last three sessions.
EIA crude oil report showed a massive jump in stockpiles, the weekly headline number was a 10.2 million barrel build compared to consensus expectations of a 3.4 million draw.
• Gold spot prices dipped after the hawkish FOMC decision and press conference.
Prices were quick to recoup losses and trading around breakeven for the session.
"Gold's recent gains were mainly driven on hope that the Fed could be done with a last rate rise in February, but this FOMC decision shows that is not the case." - Oanda senior market analyst, Ed Moya
Source: Dow Jones Newswires, AFR
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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