ASX to slip, S&P 500 slides on recession worries

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The local currency was 0.4 per cent lower; the Bloomberg dollar spot index edged higher.

On bitstamp.net, bitcoin was down 1.4 per cent to $US20,901 near 4.50am AEDT.

The yield on the US 10-year note tumbled 12 basis points to 3.42 per cent at 12.47pm in New York.

Today’s agenda

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Market highlights

ASX futures down 13 points or 0.18% to 7326 near 4.45am AEDT

  • AUD -0.4% to 69.57 US cents
  • Bitcoin -1.4% to $US20,901 near 4.50am AEDT
  • On Wall St at 12.50pm: Dow -1.3% S&P -1.1% Nasdaq -0.9%
  • In New York: BHP +1.3% Rio +1% Atlassian -2.7%
  • Tesla -1.9% Apple -0.3% Amazon +0.2% Microsoft -1.2%
  • Stoxx 50 flat FTSE -0.3% CAC +0.1% DAX flat
  • Spot gold -0.2% to $US1903.68 an ounce at 12.47pm New York time
  • Brent crude +0.2% to $US86.07 a barrel
  • 10-year yield: US 3.42% Australia 3.54% Germany 2.01%
  • US prices as of 12.47pm in New York

United States

Retail sales plummeted 1.1 per cent last month, the biggest drop since December 2021. Data for November was revised to show sales decreasing 1.0 per cent instead of 0.6 per cent as previously reported. Economists polled by Reuters had forecast sales decreasing 0.8 per cent. Retail sales rose 6.0 per cent year-on-year in December.

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Retail sales are not adjusted for inflation. December’s decline in sales was likely in part the result of goods prices falling during the month.

A separate report from the Fed showed manufacturing output dropped 1.3 per cent in December and production in the prior month was much weaker than initially thought.

News on inflation continued to be encouraging, with a third report from the Labor Department showing the producer price index for final demand decreased 0.5 per cent in December after rising 0.2 per cent in November. In the 12 months through December, the PPI increased 6.2 per cent after climbing 7.3 per cent in November.

Microsoft plans 10,000 job cuts, to take $1.7b charge Microsoft said the layoffs come as the software giant sees customers exercise caution, with some parts of the world in recession and others heading toward one.

From Davos

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Global company tax shake-up to unleash $360b revenue boost The OECD says a huge revenue boost will come from the 135-country deal to set a global minimum company tax rate and reform how big multinationals are taxed.

‘We are fooling ourselves on the timeline’: Rio CEO’s warning on solar Rio Tinto’s Jakob Stausholm tells Davos that people are underestimating how long it will take to build large-scale solar and wind farms, even in Australia.

Commodities

In a monthly steel market comment, Platts, a unit of S&P Global Commodity Insights, had a cautious outlook for iron ore: “Expectations have risen on China iron ore demand increasing after easing of COVID-19 measures, while iron ore demand could pick up when mill restocking needs resurface after the upcoming Lunar New Year holidays in China.

“However, more steel mills may reduce operation rates if steel production margins remained depressed, which might add some demand pressure for iron ore in January.”

As of January 13, iron ore stocks at Chinese ports were 133.59 million tonnes, down 15 per cent on the year, but up 1.74 per cent on the week, Platts reported. In the week to January 13, ore stocks for trade were at 79.52 million tonnes, down 15 per cent on the year, but up 0.66 per cent on the week, with stocks enough for 41 days.

On January 13, Chinese steel sector’s imported iron ore inventories were at
102.4 million tonnes, down 11 per cent year on year, but up 2.9 per cent on the week.
That indicated stocks would last for 37 days, down 13 per cent on the year, but up 2.5 per cent on the week, Platts said.