IG Markets Morning Thoughts

IG Markets Morning Thoughts

On Wall St, US markets slumped during Friday evening’s session as a report showed consumer sentiment had dropped to its lowest level in a nearly a year and earnings reports disappointed market expectations.

The technology heavy NASDAQ was the worst performer, down 3.1% while the S&P 500 and Dow Jones Industrial Average gave up 2.9% and 2.5% respectively. The S&P 500 was down 1.2% for the week.

Domestically, the ASX 200 is called to open 1.7% lower at 4349 after the big falls seen on Wall St. Losses are likely to be widespread as all sectors in the US finished firmly in negative territory.

Financials will likely see a lot of selling after the US financials sector was the standout loser, slumping 4.2%. Despite beating market expectations, both Bank of America and Citigroup were smashed as revenue numbers disappointed the market. Citigroup was down more than 6% while Bank of America fell 9.2%.

Material names will come under pressure too after the US basic materials space lost 2.7%. On the London Metals Exchange, all base metals were weaker between 1.7% and 2.1% while in normal London trade, Rio Tinto and BHP Billiton fell 0.8% and 0.7% respectively. BHP Billiton’s ADR is calling the locally listed stock to open 0.8% lower at $37.85.

Elsewhere, we should see significant weakness across the other major sector after the consumer discretionary, energy and industrial sectors were all down more than 2.4%.

In summary, it looks like being a very bleak day for local equities as we follow global leads lower. After a sharply weaker open, attention will turn towards how Asia is trading for further clues.

ENDS

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