Dow Jones: ASX set to plunge as Wall Street loses 3 per cent

Written by The ReReport

Australian shares are set to bleed red as scepticism builds over the US-China trade truce, with Wall Street coming down hard from its post-G20 sugar hit.The SPI200 futures contract is down 75 points, or 1.32 per cent, to 5,625.0, at 0800 AEDT on Wednesday, pointing to sharp opening drop for the ASX.An early fall would extend Tuesday’s broadbased losses, with positive sentiment from the trade truce brokered between US President Donald Trump and Chinese President Xi Jinping dissipating.On Wall Street, the major US indexes are lagging nearly per cent each on trade fears and worrisome signs about economic growth from the US bonds market.In late trade the Dow Jones Industrial Average fell 741.58 points, or 2.87 per cent, to 25,084.85, the S&P 500 lost 83.01 points, or 2.97 per cent, to 2,707.36 and the Nasdaq dropped 245.4567 points, or 3.3 per cent, to 7,196.0553.The Aussie has also softened, buying 73.37 US cents, down from 73.70 US cents on Tuesday.Oil has edged higher in volatile overnight trade, while iron ore is up and copper is down.Gold prices soared to a new five-week peak on a subdued greenback.In local company news, TPG is set to hold its annual general meeting a day after being slapped with federal court proceedings for allegedly pocketing millions of dollars from a non-refundable $20 fee and seeking compensation for consumers.Meanwhile, experts are waiting to see just how heavily the country’s housing market is weighing on consumption when September quarter GDP figures are released at 1130 AEDT by the Australian Bureau of Statistics.media_camera‘People are starting to dissect the reality to the tariff agreement.’ Picture: Spencer Platt/Getty Images/AFPWALL STREET PLUNGES 3 PER CENT — AFPWall Street stocks were pummeled Tuesday by worries over slowing US growth and trade conflict amid mounting scepticism over the US-China tariff truce.The Dow Jones Industrial Average closed down 3.1 per cent, or almost 800 points, at 25,027.07.The broadbased S&P 500 tumbled 3.2 per cent to 2,700.06, while the tech-rich Nasdaq Composite Index dived 3.8 per cent to 7,158.42.A day after global stocks rallied on a weekend US-China announcement suspending new tariffs, global markets mostly pulled back as investor focus shifted to the murkiness over what was agreed to and the difficulty reaching resolution to disputes on thorny matters such as intellectual property.“People are starting to dissect the reality to the tariff agreement,” said Manulife AM Senior Portfolio Manager Nate Thooft.US President Donald Trump appeared to be back in fighting mode after the weekend show of comity, saying he would “happily” sign a “fair” deal with China but was also ready to take a harder line.“I am a Tariff Man,” Trump said on Twitter. “When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN.”The drop in US stocks also came amid a signal from bond markets that has traditionally been a precursor to a recession.The difference in yield between the two- and 10-year US Treasury notes has narrowed sharply in recent days, raising concerns about a so-called “inversion” in which interest on short-term bonds overtakes the rate on long-term bonds.A note from S&P Global Ratings predicted that US growth would slow from 2.9 per cent in 2018 to 2.3 per cent in 2019 and 1.8 per cent in 2020, adding that the US was nearing the “latter” stages of a multi-year growth cycle.Large banks were among the big losers, with JPMorgan Chase shedding 4.4 per cent, Bank of America losing 5.4 per cent and Citigroup 4.4 per cent.Big technology companies also suffered, including Apple, which fell 4.4 per cent, Amazon, down 5.9 per cent and Microsoft, which lost 3.2 per cent.Originally published as Trump ‘tariff’ tweet smashes Wall St

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