The Australian sharemarket looks to open lower following a big sell off in the US. Shares suffered there worst day since March and stocks that have surged recently on hopes of a reopening of the economy led the declines. Investors dumped airlines, cruise operators and retailers. One of the underlying reasons for the sell off may be the growing number of coronavirus cases in the US as states reopen from lockdowns. Thursdays moves lso came on the back of the Federal Reserve warning that the US economy will contract by 6.5 per cent in 2020 before expanding by 5 per cent next year. The central bank also said it will keep rates at current low levels through to 2022.
Meantime, the Aussie dollar has dropped back again this morning related to as money has gravitated back to the US dollar
Wall Street closed lower yesterday: The Dow Jones Industrial Average plunged 6.9 per cent to 25,128, the S&P 500 lost 5.9 per cent to 3002 and the NASDAQ dropped 5.3 per cent to 9493.
European markets closed lower, London’s FTSE fell almost 4 per cent, Paris lost 4.7 per cent and Frankfurt closed 4.5 per cent lower.
Asian markets closed lower, Tokyo’s Nikkei dropped 2.8 per cent, Hong Kong’s Hang Seng closed 2.3 per cent lower, and China’s Shanghai Composite closed 0.8 per cent lower.
Returning home, the SPI futures are pointing to a 3.04 per cent fall.
Yesterday, the Australian share market closed 3.1 per cent lower at 5961.
US Economic news
More than 1 million Americans filed for unemployment insurance last week as the coronavirus pandemic continued to spur layoffs across the nation. That brought the 12-week total to 44 million. Yesterday’s report also marked the 10th straight week of declining claims.
Local economic news
Today the Reserve Bank releases credit & debit card lending for April.
New Zealand company Infratil (ASX:IFT) has opened its NZ$50 million share purchase plan. Eligible shareholders will be able to purchase shares at a price $4.76 per, or a 2.5% discount to the 5-day volume weighted average price of shares traded on the NZX. Shares in Infratil (ASX:IFT) closed flat at $4.65 yesterday.
One Australian Dollar at 7:50 AM was buying 68.46 US cents, 54.39 Pence Sterling, 73.13 Yen and 60.64 Euro cents.
Iron Ore lost 0.2 per cent to US$103.74.
Iron Ore futures suggest a 0.1 per cent fall.
Gold has gained $19.10 to US$1740 an ounce.
Silver has added 9 cents to US$17.89 an ounce.
Oil was down $3.26 to US$36.34 a barrel.