Nerves are high ahead of the Trump-Harris debate. Pic: Getty Images
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Aussie shares are set to open slightly higher today, tracking gains in New York. At 8am AEST, the SPI ASX200 futures contract was pointing up by 0.1%.
Overnight, the S&P 500 rose by 0.45%, the blue chips Dow Jones fell by 0.23%, while the tech heavy Nasdaq lifted by 0.84%.
JPMorgan Chase dropped sharply by 5%, marking its biggest decline in over four years and dragging down other US bank stocks.
The slide followed JP President Daniel Pinto’s remarks that analysts were too optimistic about the bank’s expenses and net interest income outlook for the coming year.
But there was some good news for the banking sector. The Biden administration has suggested a reduced 9% increase in capital requirements for major US banks, down from the original 19% proposed by the Fed and other regulators.
Across the Atlantic, Apple has lost a court battle over a staggering US$14 billion Irish tax bill.
Apple has been hit with the tax bill by Europe’s top court, ending an eight-year legal battle over its Irish tax deals.
This all goes back to 2016 when the European Commission told Ireland to collect up to 13 billion euros (US$14.4 billion) from Apple, claiming the tech giant received illegal tax perks over 20 years.
The court’s ruling came just hours after Apple launched its new iPhone, Apple Watch, and AirPods. Apple shares dropped just 0.4% following the news.
Elsewhere, Oracle jumped over 11% after the company posted earnings that exceeded expectations, driven by strong demand for its cloud services.
This was further boosted by Oracle’s announcement of a new partnership with Amazon’s AWS, which should ramp up its growing database business.
Taiwan Semiconductor (TSMC) shares on the NYSE fell by up to 3% despite providing strong figures for August. Revenue was up 33% last month, which is a good sign for the recovery in the smartphone market and the demand for Nvidia’s AI chips.
In commodities, Brent crude oil slumped by 3%, dropping below US$70 a barrel and hitting its lowest level in over two and a half years.
The selloff follows Opec’s move to slash its oil demand forecast for 2024 and 2025, sparking worries about an oversupply of crude.
Adding to the pressure, there’s growing concern over a slowing US economy and a faltering economic recovery in China.
“The message from China is simple but loud and reverberates throughout the globe,” said Tamas Varga at PVM Oil.
Meanwhile, China’s stock market is in a deeper hole, with losses hitting US$6.5 trillion yesterday as the benchmark index neared its lowest since January 2019.
The ongoing property crisis is dragging down consumer spending and worsening the deflationary cycle.
“The market situation is dire [in China], and the economy is worse off than I expected six months ago,” said Ron Temple at Lazard Asset Management.
And on the economics front, tonight’s US CPI data should give us some hints after the latest jobs report left everyone unsure about how much the Fed might cut rates.
The CPI update, along with Thursday’s wholesale inflation numbers, are the final pieces of the puzzle before the policymakers’ meeting on September 17.
Back home, Sarah Hunter from the RBA will present a speech titled “Understanding the Journey to Full Employment” at the Barrenjoey Economic Forum in Sydney, starting at 10:20am AEST.
Donald Trump and Kamala Harris are set to go head-to-head in their first presidential debate in the next couple of hours, adding another layer of intrigue for the markets.
Investors seem to be feeling more anxious than they did before Trump’s last debate with President Joe Biden in June.
There’s already noticeable tension in the markets. A three-month gauge of dollar volatility is hitting levels not seen since the March 2023 banking crisis, while the fear gauge for stocks is climbing again after a spike in early August.
Bond traders are also facing increased uncertainty as mixed economic signals make it tricky to predict Federal Reserve rate cuts.
With the debate set for tonight investors are hoping for some clarity after months of navigating vague campaign promises on taxes, tariffs, government spending, and policies on energy and healthcare.
“Although there are political shocks happening all over the world, the biggest risk is still the US election in November,” said a note from foreign exchange broker, XTB.
The debate will start at 11am AEST today.
Gold price rose by 0.4% to US$2,516.85 an ounce.
Oil prices plunged by 3%, with Brent crude now trading at US$69.69 a barrel.
The benchmark 10-year US Treasury yield slipped by 5 basis point (bond prices higher) to 3.65%.
The Aussie dollar fell by 0.15% to US66.55 cents.
Bitcoin meanwhile was up 0.2% in the last 24 hours to US$57,530 and Ethereum also rose by 0.7% to US$2,379.
IXUP (ASX:IXU)
IXUP has signed a multi-year deal with the Western Australian Biodiversity Science Institute (WABSI) to use its Secure Data Engine technology with Microsoft Azure for the SEAF project. This project, which includes big names like Rio Tinto and BHP Billiton, will start in the Pilbara and Cockburn Sound, testing the tech with limited data. If successful, it could expand further. IXUP says this contract ensures the company a steady revenue stream and opens doors for future opportunities both nationally and internationally. IXUP is a tech company with software that uses advanced encryption to securely share and analyse sensitive information.
Enegex (ASX:ENX)
Enegex has wrapped up a high-resolution magnetic survey over its Rocky Ridge gold prospect, revealing new targets and promising structures. The survey, covering 17 square kilometres, has highlighted potential areas for drilling, including previously untested zones. With agreements in place for drill access, Enegex plans to ramp up field activities after the current cropping season to explore these new gold and copper targets.
Catalyst Metals (ASX:CYL)
Catalyst is set to double its gold production to 200,000 ounces annually, thanks to a major increase in reserves, with the expansion costing just $31 million. This growth plan will see the Plutonic gold mine transition to new ore sources and set the stage for further exploration with $25 million allocated for the next fiscal year. With $54 million in free cash flow from last year and a solid cash position, Catalyst said it was well-prepared to fund these developments and explore new opportunities along the Plutonic Gold Belt.
Peel Mining (ASX:PEX)
Peel says recent drilling at Wagga Tank has uncovered some of the highest-grade mineralisation seen so far. The program tested for copper and gold and showed impressive results in drillhole WTRC255, including supergene mineralisation with over 3,000 grams of silver per tonne and high levels of copper and gold, and a sulphide zone with high lead and zinc grades. This new mineralisation is outside the current resource area and is open for further exploration to the north. Peel says the promising results suggest there’s more to discover, with additional assays still to come.
Brookside Energy (ASX:BRK)
Brookside is gearing up to list on the NYSE American exchange and consolidate its capital as part of a move to boost its US presence. The company will maintain its primary ASX listing while introducing American Depositary Shares to represent its ASX shares. Brookside is also planning a capital consolidation, reducing the number of shares by a 1-for-50 ratio to make the company more attractive to international investors. Further updates and shareholder voting details will follow.
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