Note: Figures recorded at 7:45am AEDT. The closing figures and video recording will be available at 9:00am AEDT.
Stocks slipped on Monday as investors questioned whether the market was getting ahead of itself following five straight winning weeks.
The Dow Jones Industrial Average shed 60 points, or 0.2%. The S&P 500 lost 0.7%. The Nasdaq Composite declined 1.1% as investors sold Big Technology shares, which have led the market’s gains this year.
The Nasdaq Composite experienced a significant decline of over 1% during Monday's session, primarily driven by a drop in popular artificial intelligence and megacap stocks. It was poised to register the largest losses among the three major stock market indexes, with notable underperformers including Sirius XM, Trade Desk, Zoom Video, Intel, Nvidia, and Palo Alto Networks, all witnessing declines of at least 3% to 6.5%, while other major companies like Netflix, Alphabet, Advanced Micro Devices, Meta Platforms, Micron Technology, and Marvell Technology also posted losses of around 2% each.
Alaska Air Group dropped 15% after it agreed to acquire rival Hawaiian Airlines for $1.9 billion. The move is part of Alaska’s efforts to expand along the West Coast.
Interestingly, small-cap stocks have stood out recently, benefiting from the expanding market rally driven by Fed policy and soft landing expectations. Jefferies noted that the Russell 2000 (R2K) is trading at a modest 13% premium to the S&P 500, which is near recent lows and significantly lower than the relative valuation seen during the Global Financial Crisis (GFC), suggesting the potential for small-cap outperformance in the near future, historically associated with such levels of underperformance.
Bitcoin passed the $42,000 mark to notch a 20-month high, driven by expectations of U.S. interest rate cuts and speculation about the approval of exchange-traded spot bitcoin funds, dispelling previous market concerns stemming from crypto-business failures. In response, Marathon Digital and Riot Platforms both jumped more than 8%. Microstrategy and Coinbase gained more nearly 7% and 6%, respectively.
Saudi Arabia's energy minister, Prince Abdulaziz bin Salman, has rejected the idea of phasing out fossil fuels at the UN's COP28 climate talks, setting the stage for challenging negotiations in Dubai. Despite a tentative "phasedown/out" proposal in the draft agreement, the world's largest oil exporter firmly stated its opposition to such measures, signalling potential obstacles in reaching a consensus on climate action.
Shifting to the Australian landscape, today is the RBA’s final policy meeting of 2023. Many analysts are suggesting that the RBA will maintain interest rates given soft economic data and the RBA's commitment to preserving the labour market.
Futures
The SPI futures are pointing to a 0.53 per cent fall.
Currency
One Australian dollar at 7:40 AM was buying 66.16 US cents.
Commodities
Gold lost 1.97 per cent. Silver lost 3.68 per cent. Copper lost 2.62 per cent. Oil fell 1.01 per cent.
Figures around the globe
European markets closed mixed. London’s FTSE lost 0.22 per cent, Frankfurt gained 0.04 per cent, and Paris closed 0.18 per cent lower.
Turning to Asian markets, Tokyo’s Nikkei fell 0.6 per cent, Hong Kong’s Hang Seng lost 1.09 per cent while China’s Shanghai Composite closed 0.29 per cent higher.
The Australian share market closed 0.73 per cent higher at 7,124.65.
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
