Wall Street took a plunge into the red in yesterday’s session. The Dow fell sharply closing 337 points lower. Investors are in selling territory over inflation concerns and the prospect of an interest rate hike. The US 10-year treasury yield traded close to levels not seen since 2014. Health care was led the worst performing sectors, with UnitedHealth falling 3.8 per cent.
In commodities, oil has dropped 1.5 per cent, gold has also taken a downward turn, and iron ore has started to come up again.
US economic news
Consumer confidence in the US increased more than expected in January. The unemployment rate is sitting near a 17-year low and house prices increased further.
The Redbook index increased 3.2 per cent as of last week compared to the same week in the previous year, showing positive growth in US retail sales.
Local economic news
The consumer price inflation report for the December quarter will be released today, with expectations that inflationary pressures will increase. The September quarter saw a 0.6 per cent rise, and annual inflation is near 2 per cent.
Private sector credit for the month of December will be out, which increased half a per cent in November, above market expectations. Annual growth is near 5.4 per cent.
Wall Street closed in the red yesterday: The Dow Jones Industrial Average lost 1.4 per cent to close at 26,077, the S&P 500 dropped 1.1 per cent to close at 2,822 and the NASDAQ fell 0.9 per cent to close at 7,402.
European markets closed lower: London’s FTSE dropped 1.1 per cent, Paris lost 0.9 per cent and Frankfurt fell almost 1 per cent.
Asian markets closed up/ lower /mixed: Tokyo’s Nikkei dropped 1.4 per cent, Hong Kong’s Hang Seng fell 1.1 per cent, and China’s Shanghai Composite fell 1 per cent.
The Australian share market closed lower yesterday. The S&P/ASX 200 Index closed 53 points down to finish at 6,023.
On the futures market the SPI is 19 points down.
Winemaker Treasury Wine Estates (ASX:TWE) has announced a 37 per cent increase in half year profits to $187.2 million, beating expectations, on the back of strong sales in Asian markets. The wine company that owns Penfolds and Wolf Blass says strong demand in Asia, Europe, Australia and New Zealand is outperforming expectations. Reported earnings per share increased 38 per cent to 25.6 cents and earnings before interest and tax increased 25 per cent. The board declared an interim dividend of 15 cents per share, 75 per cent franked. Shares in Treasury Wine Estates (ASX:TWE) closed 1.28 per cent lower at $17.00 yesterday.
Five companies are going ex-dividend today:
Integral Diagnostics (ASX:IDX) is paying 4 cents fully franked,
MCP Master Income (ASX:MXT) is paying 0.81 cents unfranked,
Ozgrowth (ASX:OZG) is paying 0.25 cents fully franked,
Viva Energy REIT (ASX:VVR) is paying 6.6 cents unfranked, and
Westoz Investment Company (ASX:WIC) is paying 3 cents fully franked,
One Australian Dollar at 8:30AM was buying 80.83 US cents, 57.15 Pence Sterling, 87.93 Yen and 65.20 Euro cents.
Gold has dropped $3.80 to $US1,341 an ounce.
Silver has lost $0.03 to $US17.09 an ounce.
Oil has lost $1.20 to $US64.36 a barrel.
The three most traded cryptocurrencies have all dropped.
Bitcoin has fallen 9.2 per cent to $10,269.
Ethereum fell 8 per cent to $1,087.
Tether has dropped 0.6 per cent to $0.99.