Pelosi Taiwan visit adds new risk to equity markets: Inflation still on the agenda

If you would like to watch a video of the outlook report, click here. Thanks for tuning in!

US equities were lower in fairly choppy Tuesday trading, finishing just off worst levels. Stocks slumped on Tuesday as investors weighed increased tensions between the US and China.

US House of Representatives Speaker Nancy Pelosi arrived in Taiwan on Tuesday, becoming the highest-ranked American official to visit the self-ruled island that is claimed by China in 25 years. Her arrival set up a high-stakes standoff between the US and China.- we’ll wait and see the outcomes - buts its another risk to markets that have been unexpected

Asian markets have been weaker in anticipation of the visit.

Stocks wavered early in the afternoon, reacting to multiple comments from regional Fed presidents who all threw cold water on the idea that the central bank will be done raising rates or move them lower anytime soon.

Chicago Fed President Charles Evans said that he hopes the central bank can raise its benchmark interest rate by half a percentage point in September and then continue with quarter-point hikes until the start of the second quarter in 2023. San Francisco Fed President Mary Daly said that the central bank still has work ahead to combat inflation.

Overnight the S&P 500 slipped 0.67 per cent after being down nearly 1 per cent earlier in the session.. The Dow Jones Industrial Average lost 1.23 per cent, to 32,396.17.

Caterpillar weighed on the 30-stock index and shares slid after the company posted disappointing quarterly earnings.

The Nasdaq Composite fell 0.16 per cent to 12,348.76, even though Uber jumped 18.9 per cent

Uber reported record revenue and says more drivers are using its platform than ever before. The company outperformed analysts’ expectations, posting $8 billion in revenue, a 105 percent increase from a year earlier.

Airbnb shares traded sharply lower in late trading after the the company posted second quarter results in line with the companies guidance, but apparently not quite as good as investors had hoped. In late trading , Airbnb shares were off 9.6 per cent.

In the online trading world, Robinhood, the trading app that popularized one-click trading and helped fuel last year’s meme stock frenzy, said on Tuesday that it was laying off about 23 percent of its work force.

Overnight best performing sectors included social media, EV charger, hydrogen, education, and cannabis

In currency news, the $US Dollar was firmer on the major crosses, with Aussie weakness the big FX story of the day.

One Australian dollar has weakened compared to the US dollar yesterday, buying 69.22 (Tue: 70.24 US cents), 56.90 Pence Sterling, 92.16 Yen and 68.06 Euro cents.

In Commodity news, Iron ore futures are pointing to a 0.6 per cent fall.

Gold gained $2.00 or 0.1 per cent to US$1790 an ounce.

Silver was down $0.22 or 1.1 per cent to US$20.14 an ounce.

Copper was down $2.40 or 0.7 per cent to US$351.85 a pound.

Oil added $0.53 or 0.6 per cent to US$94.42 a barrel.

The SPI futures are pointing to a 0.2 per cent fall.

Figures around the globe

Across the Atlantic, European markets closed lower. Paris fell 0.4 per cent, Frankfurt lost 0.2 per cent and London’s FTSE closed 0.1 per cent lower.

Asian markets closed lower. Tokyo’s Nikkei lost 1.4 per cent, Hong Kong’s Hang Seng dropped 2.4 per cent and China’s Shanghai Composite closed 2.3 per cent lower.

Yesterday, the Australian sharemarket added 0.1 per cent to 6,998.

Ex-dividends

There are three companies set to trade without the right to a dividend.

AMCIL (ASX:AMH) is paying 2.5 cents fully franked
CVC (ASX:CVC) is paying 5 cents fully franked
Qualitas Real Estate Income Fund (ASX:QRI) is paying 0.8151 cents unfranked

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

Are you a 708 sophisticated investor?

A sophisticated investor is defined under Section 708 of the Corporations Act (net assets of $2.5 million or annual incomes in excess of $250,000).

They are eligible to receive information regarding wholesale investment opportunities that are not available to regular or retail investors.

Please subscribe if you would like to be alerted to these types of opportunities.