Falling consumer demand hits retailers: Commodities soaring

Market Reports

by Lauren Hayes

The S&P 500 fell on Wednesday as investors weighed a gloomy holiday quarter update from Target that pressured retail stocks. Target blamed higher inflation and shifts in consumer spending for the drop in demand for everything from toys to home furnishings.

The warning weighed on stocks, sending Target down more than 13 per cent and on pace for its worst day since May. Macy’s, Nordstrom, Kohl’s and Gap were also down on the day.

In economic news, the UK’s inflation rate hit a new 41-year high in October, accelerating to 11.1 per cent on the back of rising energy and food prices. Economists had expected a rate of 10.7 per cent.

The S&P 500 ended the day down 0.8 per cent to 3,959 and the Nasdaq Composite shed 1.5 per cent to 11,184. The Dow Jones Industrial Average wrestled with the flat line all day, but finished down 0.1 per cent at 33,554.

In company news, Elon Musk set an ultimatum for Twitter workers. The billionaire emailed employees overnight, ordering them to pledge themselves to a new “hardcore” version of the company by 5 p.m. or receive three months of severance pay. He also set Nov. 29 as the debut of a revised Twitter Blue subscription service.

And Ford’s C.E.O. warned that making electric vehicles involves using far fewer workers. Jim Farley, whose company is betting heavily on a transition to E.V.s, said that their production requires 40 percent less labour than traditional cars.

Across the sectors, utilities and consumer staples were the only sectors ending the session in the green.

Commodities are also soaring. Gold has jumped nearly 10 percent over the past two weeks, as have other major industrial metals like aluminium and copper. That surge in commodity prices isn’t just “Fed-focused speculation". Signs of an improving U.S. economy and China’s recent move to prop up its ailing property market are drawing buyers to the metals market.

And nickel has surged to its highest levels in more than 6 months, The benchmark nickel 3 month contract surged briefly to hit the London Metal Exchange’s daily trading limit of 15 per cent. Nickel prices have rallied almost 25 per cent in five days off the back of optimism over the Chinese economy reopening. 

And the surging oil price has resulted in a record haul for global dividends in the third quarter, without the $19.9bn contribution from the oil sector, the global total would have been flat year on year, according to Janus Henderson Global Dividend index.


One Australian dollar at 8:10 AM has weakened compared to the US dollar yesterday buying 67.41 US cents (Wed: 67.65 US cents). 


Iron ore is 2.5 per cent higher at US$98.10 tonne.

Iron ore futures are pointing to a 0.6 per cent fall.

Gold added 0.02 per cent. Silver lost 0.1 per cent. Copper fell 1.7 per cent and oil lost 1.9 per cent.


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 0.5 per cent, Frankfurt lost 1 per cent and London’s FTSE closed 0.3 per cent lower.

In Asian markets, Tokyo’s Nikkei added 0.1 per cent, Hong Kong’s Hang Seng fell 0.5 per cent and China’s Shanghai Composite closed 0.5 per cent lower.

Yesterday, the Australian sharemarket lost 0.3 per cent to close at 7122.


Cobram Estate Olives (ASX:CBO) is paying 3.3 cents 70 per cent franked
SSR Mining Inc (ASX:SSR) is paying 8.1219 cents unfranked
Westpac Banking Corp (ASX:WBC) is paying 64 cents fully franked
WAM Leaders (ASX:WLE) is paying 4 cents fully franked

Dividends payable

Bank of Queensland (ASX:BOQ)
Jupiter Mines (ASX:JMS)

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


The views, opinions or recommendations of the commentators in this presentation are solely those of the author and do not in any way reflect the views, opinions, recommendations, of Sequoia Financial Group Limited ABN 90 091 744 884 and its related bodies corporate (“SEQ”). SEQ makes no representation or warranty with respect to the accuracy, completeness or currency of the content. Any prices published are accurate subject to the time of filming and shouldn’t be relied up to make a financial decision. Commentators may hold positions in stocks mentioned and companies may pay FNN to produce the content at times. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian Financial Services Licensee before making investment decisions. To the extent permitted by law, SEQ excludes all liability for any loss or damage arising in any way including by way of negligence.

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