ASX to slip; Wall St drops after mixed Microsoft and Alphabet results

ASX futures down 22 points or -0.2% to 6845 near 5am AEDT

• AUD -0.7% to 63.09 US cents
• Bitcoin +2.2% to USUS34,594 at 4.47am AEDT
• On Wall St: Dow -0.4% S&P -1.5% Nasdaq -2.5%
• In New York: BHP +1.1% Rio +1.0% Atlassian –5.7%
• Tesla -1.0% Apple -1.4% Amazon -5.4%
• VIX +10.0% QQQ -2.4% TLT -2.5% MOVE -2.8%
• Stoxx 50 +0.2% FTSE +0.3% CAC +0.1% DAX +0.3%
• Spot gold +0.7% to USUS1,984.69 /oz at 2pm in New York
• Brent crude +2.0% to USUS89.81 a barrel
• Iron ore +1.08% to USUS117.35 a tonne
• 10-year yield: US 3.88% Australia 3.00% Germany 2.60%
• US prices as of 2pm in New York

What’s driving markets

It’s been a big week for US earnings, with nearly one-third of the companies in the S&P 500 expected to post third-quarter results. So far, 146 of the S&P 500 have reported. Of those, 80% have delivered earnings above expectations. Analysts now see S&P 500 year-on-year earnings growth of 2.6% for the July-September period, up from 1.6% at the beginning of the month.

Strategists at Citi said PMI data was “yet another sign that a recession is not imminent. We continue to think the US economy will enter recession next year, but in the meantime, risks are balanced toward further Fed hikes, rather than cuts,” they wrote in a note Wednesday.

In the oil market, crude prices were holding relatively steady after slumping sharply earlier this week to take some pressure off inflation. A barrel of U.S. crude rise 2% to $US85.39. Brent crude, the international standard, was up 2.2% at $US89.10 per barrel.

US oil had been above $US93 last month, and it’s bounced up and down since then amid concerns that the latest Israel-Hamas war could lead to disruptions in supplies from Iran or other big oil-producing countries.

Today’s agenda

Local: Senate budget estimates; Import and export price indexes

Overseas data: ECB policy decision; US GDP Q3; US core PCE; US durable goods; US pending home sales; Kansas City fed index

United States

Bill Adams, chief economist at Comerica: “US real GDP will likely grow 2.1% in 2023, but is set to slow to 1.1% in 2024, due to these headwinds, as well as lagged effects of high interest rates and less support from fiscal stimulus.”

Stephen Innes: “The United States’ economic performance continues to stand out, with this week’s advance estimate of Q3 GDP expected to reveal robust growth at a rate of 4.3%. This reflects a strong American consumer and a broader growth momentum unaffected by interest rate hikes.

“The Federal Reserve’s objective is to achieve below-trend growth to curb inflation. However, a growth rate of 4.3% is considerably above trend and is not conducive to maintaining price stability. If the growth matches the estimates, it will mark the fastest expansion rate since Q4 of 2021.”

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