The puff ran out of the market rally in Australia yesterday and then spread to Europe and the US, so by the close of trading on Wall Street this morning, ‘wary’ would have been the best description for investor sentiment.
The move by the European Central bank to signal another round of spending in early December, and the interest rate cuts from the Chinese central bank had pumped up markets on Thursday and Friday – but yesterday, after a strong start in Asia, it faded as the day went on and the caution continued through the rest of the trading day.
So our market will start all but flat this morning – 24 hours earlier a 50 point plus gain had been signalled from trading in ASX200 futures – and that caution will continue until a couple of milestones are passed over the rest of the week.
Local investors will focus on yet another fall in the price of iron ore in China – down 1.1% overnight to $US51.03 a tonne.
The first obstacle for markets up is the Apple 4th quarter report early Wednesday morning – there are fears in the US Apple’s revenue and profits could be lower than the eager beaver analysts want them to be.
And then there’s the Fed announcement on Thursday morning, our time (and US GDP figures for the September quarter earlier that session). The Fed won’t lift rates, but what it says about the timing of the mooted lift in US rates has markets worried.
And many investors also realised that the policy changes hinted at by the ECB and then enacted by China last week were made because economic activity is weak, not strong.
The S&P 500 fell nearly 4 points, or 0.2%, lower to 2,071, thanks to a fall in energy after global oil prices eased.
But the big mover was Apple, which lost more than 3% ahead of its earnings release tomorrow, on the growing belief that the company will disappoint.
Nasdaq rose 3 points, but the Dow was down nearly 24 points.
European markets mostly fell, except Germany’s Dax which closed higher.
Gold rose $US1 to $US1,164 and oil was down 1.8% to less than $US43.90 in US trading.
In Australia yesterday, the ASX 200 finished 4 points lower to 5348. The All Ordinaries closed 2 points lower to 5386.3.
