Wall Street sinks on AI fears, ASX on edge ahead of RBA meeting
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ASX → sink → meeting
A rout of AI related stocks dragged Wall Street down on Friday, while another rise in oil prices and the massive theft from the world's biggest crypto exchange, Binance, didn't help sentiment.
The ASX is on edge this morning, priced for a flat opening ahead of the RBA rates decision and results from the big banks this week.
Follow the day's financial news and insights from our specialist business reporters on our live blog.
Disclaimer:
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ASX → relate → blog
this blog is not intended as investment advice.
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blog → intend → advice
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Key Event
Wall Street tumbles on mounting AI fears, ASX on edge
Wall Street closed the week, maybe not in a blind panic, but there was certainly a disquieting dumping of stocks as investors fled to the exits and the weekend.
All three key indices fell sharply, the tech-centric Nasdaq fell the hardest and is down almost 8% from its record high of just three weeks ago.
- S&P 500: 1.8%
- Dow: -1.1%
- Nasdaq: 2.9%
The dump saw the global MSCI down 1.5% for the day, while the pan-continental Eurostoxx 600 fell a comparatively modest 0.4%.
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Eurostoxx → choose → day
The tech-lite ASX is unlikely to be as affected by anxieties over cash-burning AI investments as Wall Street was on Friday.
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Street → affect → Friday
When trading closed on Saturday morning (AEDT) ASX 200 futures were flat, or to be precise 4 points (0.04%) lower.
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futures → close → morning
The tech rout was sparked by disappointing quarterly results from Intel and Amazon released late on Thursday.
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rout → spark → Thursday
While Amazon pared losses as the session progressed, Intel shares cratered, down almost 30%
Chip stocks veered sharply lower, with Nvidia down more than 4%.
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Nvidia → par → losses
The broader chips index shed 7.2%, slumping to a monthly loss of more than 15%.
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index → shed → %
Server makers Dell and HP dropped 10.8% and 9.6%, respectively.
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Dell → drop → ?
"It's fair to say that this week, not just today, has been very much about the future of AI and what that's going to look like, whether there will be a positive return on investment and if so, how quickly," Wealthspire Adivors Oliver Pursche told Reuters.
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Pursche → say → Reuters
"Companies that are performing and meeting the very lofty expectations that have been set are doing well," Mr Pursche said.
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Pursche → perform → expectations
"Those that are falling short and seem to be missing the mark or not executing as expected are getting punished."
On the subject of being punished, cryptocurrency related firms all got walloped on the news that hackers nicked a lazy $US6.3 billion ($9 billion) worth of various stable coins, such as Bitcoin and Ethereum, while no one was looking at the world's biggest crypto exchange Binance.
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one → fall → exchange
Listed crypto firms Coinbase, Strategy and Robin Hood all fell between 7 and 11%.
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firms → list → ?
All said they were safe, but they would say that.
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they → say → that
Putting aside the Binance contretemps, it's worth noting that hackers have made off with around $US3 billion in cryptos in around 150 incidents last
US
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hackers → put → incidents
Treasuries were one of the beneficiaries of the tech rout as investors decided they were a safer bet at the moment, which is saying something.
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which → decide → something
The benchmark 10-year yield closed the month with its biggest monthly drop in nearly three years.
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yield → close → years
Gold, once also considered a safe haven, didn't benefit from the conniptions — indeed, it slumped (-3.5%) to a one-year low, along with other precious metals.
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it → consider → metals
Silver shed 6.5% and palladium shed 3.0%.
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palladium → shed → %
"The sky is falling," independent metals trader Tai Wong told Reuters with a dramatic flourish.
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Wong → fall → flourish
"Metals will not be able to escape the gravity well of a nasty stock correction.
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Metals → escape → correction
Earnings have been the foundation of the AI rally and now that pillar is showing some cracks."
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pillar → show → cracks
Oil seems to be blithely ignoring Mr Wong's "gravity well".
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Oil → seem → well
The key benchmarks both gained more than 2% on Friday.
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benchmarks → gain → Friday
WTI crude futures: +2.1% to $US113.43/barrel
For the month, Brent finished almost 14% higher, while WTI rose even more, up 15%.
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WTI → finish → month
On Friday, a tanker in the Strait of Hormuz was hit by explosive devices, believed to be limpet mines attached by a small boat, according to UKMTO, the British maritime security service.
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tanker → hit → UKMTO
It is believed to be the first successful use of limpet mines since the war began in February.
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war → believe → February
Stephen Letts from ABC business team limbering up for a blow-by-blow coverage of the day's events, where every post is hopefully a winner, but none should be construed as financial advice.
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none → limber → advice
Wall Street closed sharply lower on Friday, driven down a major sell-off of AI- related stocks.
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Street → close → stocks
The ASX, largely an AI-free zone, is poised to open flat, with futures trading pointing to only a marginal loss ahead of tomorrow's RBA rates decision.
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trading → poise → decision
We've already seen October's home price numbers — a nationwide decline of 1.2%.
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We → see → %
We'll have more housing news a bit later with September's dwelling approvals being released and Westpac's full year results will be posted very soon — and they are likely to be a key driver of sentiment today.
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they → have → sentiment
The key number to look out for is a cash profit of $6.96 billion.
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number → look → billion
The game's afoot, so let's get blogging.
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's → let → ?
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