S&P 500 kicks off two-day rally, BHP, Bowen Coking Coal, MLG Oz, ANZ Bank on watch: ASX up

Global markets were almost in a sea of ​​red as commodity prices weighed on major indexes. What to look for on the ASX today.

S&P 500 takes two-day rally on Powell testimony

US stocks closed with fractional losses after Federal Reserve Chairman Jerome Powell reaffirmed his commitment to suppressing inflation and also acknowledged the risk of an economic downturn – a recession. Testifying in the Senate, investors heard no explicit color on the future scale of interest rate hikes, however, he tacitly admitted that the central bank had failed to do its job, saying a soft landing would be difficult to manage.

Stocks lacked conviction during the session, going through gains and losses. Investors bought back when Powell said the Fed would review incoming economic data. Shares then fell when he said the Fed would focus on bringing inflation down to its target.

At the closing bell, the Dow fell 0.2% to 30,483, the S&P 500 lost 0.1% to 3,760 and the Nasdaq closed down 0.2% to 11,053.

Oil prices fell 3%, putting downward pressure on energy stocks. They were the worst performers in the S&P 500, down 4.2%, followed by materials by 1.3%. Industrials and Information Technology lost up to 0.5% each. The four winners were real estate, up 1.6%, then healthcare, which added 1.4%, followed by utilities and communication services.

Let’s dive straight into what this means for Australian markets today.

Numbers around the world

European markets closed lower. Paris fell 0.8%, Frankfurt lost 1.1%, while London’s FTSE closed down 0.9%. On the London Stock Exchange, Rio plunged 4.4%, BP lost 3.1% and Shell fell 3.5%.

Asian markets closed lower, Tokyo’s Nikkei lost 0.4%, Hong Kong’s Hang Seng fell 2.6% while China’s Shanghai Composite closed 1.2% lower.

The Australian stock market was down 0.2% to 6,509 yesterday.

SPI Futures Contracts

Taking all that into the equation, SPI futures point to a 0.4% gain.

What to watch out for today on the ASX

In economic news, the Australian Bureau of Statistics is expected to release five reports. Of the five, March quarter finance and wealth and June trading conditions and sentiment will get some attention. Detailed labor force estimates for May are awaited. This will contain data that was not available in the first version where we received the main employment figures.

The biotech sector rose again on Wall St and real estate was a winner. Both of these sectors could be in the spotlight as energy could blow the ASX today if we take this US lead.

We continue to follow the story of the coal miners here at Finance News. Last night the executive chairman of Bowen Coking Coal (ASX: BCB) Nick Jorss said he was “extremely disappointed with the way this massive increase in royalties was implemented without any industry consultation”.

The share price fell 47% when the Queensland government announced the news on Tuesday. It recouped nearly half of its losses yesterday, adding 21.4% to 25.5 cents. Keep an eye out for another Queensland coal miner, Coronado Global (ASX: CRN) and others like New Hope (ASX:NHC) and Terracom (ASX:TER). For more on that, join me here for “Coal Miners Rebound After QLD Unveils New Coal Royalties.”

MLG Oz (ASX:MLG) could shine like gold after Evolution Mining (ASX:EVN) has selected MLG as the preferred service provider to service its Mungari operation, located in the Goldfields region of Western Australia.

BHP and Rio Tinto on Wall St fell around 4% each. Iron ore futures are stable. Keep an eye out for iron ore miners, including Fortescue Metals (ASX: FMG).

According to the AFR, ANZ Bank (ASX: ANZ) has contacted UBS and Macquarie Capital for advice on its plans to buy accounting software company MYOB. No figures on the deal are available, however, KKR paid $2.4 billion for it in 2019.

Initial Public Offering

There’s a company set to debut on the ASX today. Keep an eye on Leo Lithium (ASX:LLL) after raising $100 million at 70 cents per share.

Goods

Iron ore fell 5.6% to US$109.40. His future is flat.

Gold fell $0.40 or 0.02% to US$1,838 an ounce. Silver was down $0.35 or 1.6% at US$21.50 an ounce.

Oil fell $3.33 or more 3% to US$106.19 a barrel.

Currencies

The Australian dollar at 7:10 am has weakened since yesterday, buying 69.28 US cents (Wednesday: 69.71 US cents), 56.51 pence sterling, 94.36 yen and 65.55 euro cents.

Disclaimer

The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian financial services licensee before making investment decisions. To the extent permitted by law, Sequoia Financial Group, the owner of Finance News Network, excludes all liability for any loss or damage arising in any way, including negligence. Commentators may hold positions in the stocks mentioned.

Source: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics

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