A soft opening to ASX trading today but the real story will be the pressure on tech stocks like Afterpay Touch, Zip and Wisetech Global.
A soft day across global exchanges saw ASX 200 futures fall 14 points or 0.2% overnight Friday pointing to a soft start to trade when the Australian share market reopens this morning.
Eurozone shares fell 0.4% on Friday and the US S&P 500 fell 0.5% not helped by a sharp fall in Boeing shares in relation to 737 Max issues (See the story on US earnings with Boeing due to report its quarterly figures this week).
Last week saw US shares rise 0.5%, Eurozone shares added 0.3% (all thanks to Friday’s rise) and Japanese shares jumped 3.2%. Chinese shares fell 1.1% partly on the back of soft economic data on Friday showing annual GDP growth slowed to a 27 year low of 6% in the three months to September.
Australian shares also rose by 0.7% with solid gains in energy, health, consumer discretionary, industrial and financial shares but a sharp fall in material stocks and reduced expectations for rate cuts held the market back.
Bond yields generally rose as growth fears continued to recede a bit. Commodity prices were mixed with copper up but oil and iron ore down (a fall of close to 8% for the week took the price back well under $US90 a tonne).
The Australian dollar rose on reduced expectations for near term rate cuts and a weaker $US. The Aussie ended the week at 68.55 US cents, up half a cent for the week.
The ASX 200 index slid 35 points, or 0.5% on Friday, to close at 6649.7 – the weakness continued into the overnight futures market as Wall Street fell.
Wall Street ended lower on Friday thanks to negative headlines about Johnson & Johnson (asbestos found in talcum powder) and Boeing (undisclosed text messages revealing prior knowledge of the problematic stability system in its grounded 737 Max), along with weak economic data from China.
The Dow lost 255.68 points, or 0.95%, at 26,770.2, while the S&P 500 index dropped 11.75 points or 0.39% at 2,986. The Nasdaq Composite slid 67.31 points or 0.83% to 8,089.54.
The Dow was down 0.17% for the week, the S&P 500 was up 0.54% and the Nasdaq was up 0.4%.
All told, stocks ended the week less than 3% away from their record closes.