Geopolitical concerns weigh heavily on US markets


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

Concerns have risen after the Iranian retaliation against Israel and weaker than expected bank earnings overshadowed US markets on Friday.

The Dow Jones closed down 1.24 per cent, the S&P 500 fell 1.46 per cent and the Nasdaq finished down 1.62 per cent for the day. On a weekly measure the S&P 500 gave up 1.56 per cent, and the Dow relinquished 2.37 per cent. The Nasdaq gave up 0.45 per cent for the week.

JPMorgan Chase shares declined more than 6 per cent after the banking giant posted its first-quarter results. The bank said net interest income, a key measure of what it makes through lending activities, could be a little short of what Wall Street analysts are expecting in 2024. CEO Jamie Dimon also warned about persistent inflationary pressures weighing on the economy.

Wells Fargo slipped 0.4 per cent after reporting its latest quarterly figures. Citigroup dropped 1.7 per cent despite posting a revenue beat.

Consumers are also growing worried about the persistent inflationary pressures. The consumer sentiment index for April came in at 77.9, below the Dow Jones consensus estimate of 79.9, according to the University of Michigan’s Surveys of Consumers. Year-ahead and long-run inflation expectations also ticked up, reflecting frustrations over sticky inflation.

Turning to commodities, rising tensions in the Middle East spurred fears of a wider conflict, causing oil prices to surge and posing a new risk to global inflation and investor expectations for interest rate relief. The situation intensified with Iran launching over 200 drones and missiles at Israel on Sunday.

Overall, all sectors finished in the red on Friday. Materials was the worst performer, closely followed by Tech. Utilities recorded the fewest losses.
 
Futures

The SPI futures are pointing to a 0.6 per cent fall.

Currency

One Australian dollar at 7.25am was buying 64.65 US cents.

Commodities

Gold added 0.06 per cent. Silver gained 0.28 per cent. Copper rose 0.13 per cent. Oil gained 0.75 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE gained 0.91 per cent, Frankfurt lost 0.13 per cent, and Paris closed 0.16 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei added 0.21 per cent, Hong Kong’s Hang Seng lost 2.18 per cent and China’s Shanghai Composite closed 0.49 per cent lower.

On Friday, the Australian share market closed 0.33 per cent lower at 7,788.08.

Ex-dividends
Cadence Capital (ASX:CDM) is paying 3 cents fully franked
CDO Opportunity Fund (ASX:CDO) is paying 6.5 cents fully franked
New Hope Corporation (ASX:NHC) is paying 17 cents fully franked
SDI Limited (ASX:SDI) is paying 1.5 cents fully franked
WAM Active Limited (ASX:WAA) is paying 3 cents fully franked

Dividends payable
CAR Group Ltd (ASX:CAR)
Civmec Ltd (ASX:CVL)
Cochlear Ltd (ASX:COH)
Kina Securities Ltd (ASX:KSL)
Saunders International Ltd (ASX:SND)

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

Subscribe to our Daily Newsletter?

Would you like to receive our daily news to your inbox?