The Fed is urged to cut interest rates to address market turmoil. Picture Getty
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Aussie shares are set to to extend their losses when the market opens on Tuesday as the global selloff gathers steam. At 8am AEST, the ASX200 futures contract was pointing sharply lower by 0.8%.
Overnight, the S&P 500 plunged by 3%, losing US$3.5 trillion worth of market cap. The blue chips Dow Jones index tumbled by 2.6%, and the tech heavy Nasdaq crashed another 3.43%.
The CBOE Volatility Index (VIX), often referred to as Wall Street’s fear gauge, surged by 65% to 38.57, its highest closing level since October 2020.
The rout had spread to all corners of the world including Asia, where Japan’s Nikkei 225 plunged over 12% yesterday, its largest single-day loss ever.
“It will take some time for markets to work through this period of uncertainty and volatility,” Darrell Cronk at Wells Fargo told Forbes.
In the commodities market, copper, gold, and crude oil prices also dropped as global economic uncertainty dampened prospects for demand.
Cryptocurrencies also had losses, with Bitcoin dropping 7% in the past 24 hours.
Even safe haven gold faced selling pressure as investors took profits.
“…This decline may be temporary, as the precious metal maintains strong fundamentals that could support further price advances,” said Bas Kooijman at DHF Capital S.A.
To stocks, Apple fell around 5% amid reports that Berkshire Hathaway had halved its investment in the company.
Nvidia dropped over 6%, while Tesla tumbled more than 4%. Collectively, the “Magnificent Seven” stocks lost roughly US$650 billion in market cap.
The Fed Reserve urgently needs to cut US interest rates by 25 basis points to address the current global market turmoil.
According to Nigel Green, CEO of deVere Group, this action is necessary to counter the growing panic over the worsening state of the American economy, and to prevent a potential recession.
“The Fed was behind the curve at the beginning of the cycle, it cannot afford to be behind the curve this time, too,” Green said.
Green suggests that the Fed should announce an emergency rate cut this week, and another in September to stabilise the situation and calm rising fears.
“This panic is fuelling a significant bond-market rally and causing global stocks to plummet,” he added.
Japan’s Nikkei 225 fell by 12% in its largest one-day loss since 1987, while European shares also hit near six-month lows.
“It would be beyond negligent for the Fed Reserve not to announce an emergency interest rate cut in response to the global rout in stock markets,” Green said.
Gold price fell 1.3% to US$2,410.70 an ounce.
Oil prices slipped by 0.3%, with Brent crude now trading at US$76.60 a barrel.
The benchmark 10-year US Treasury yield traded flattish at 3.79% after dropping 40 basis points in the past week.
The Aussie dollar retreated 0.20% US65.00 cents.
The iron ore price also dropped by 0.3% to US$103.55 a tonne.
Bitcoin meanwhile slumped by 7% in the last 24 hours to US$54,865, while Ethereum also slipped by over 10% to US$2,454.
Brookside Energy (ASX:BRK)
Brookside updated shareholders on the progress of its Gapstow Full Field Development. The final well in this project, operated by Continental Resources, is set to reach its total depth this week. At the same time, Continental has started building tank batteries and preparing the drilled wells for completion. Production from the Gapstow development is expected to begin in early Q4 2024, with an estimated output of about 150 barrels of oil equivalent per day (70% liquids) net to Brookside over the first two years. This production will add to the output from Brookside’s Flames Maroons Development Plan, which is projected to start around late Q3 or early Q4 2024.
Compumedics (ASX:CMP)
Compumedics has secured a $1 million order for its Okti neurological amplifier from two top epilepsy hospitals in Berlin. This deal caps off a strong fiscal year 2024, with European orders up 63% to $7.6 million, driven by the success of the Okti amplifier. The European market for Compumedics’ products is estimated at up to EUR 300 million annually and is expected to grow by 10%.
EZZ Life Science (ASX:EZZ)
EZZ is launching four new functional food products, including nutrition powders for children and adults. Manufactured in New Zealand, these products aim to boost growth and health. EZZ will introduce them in mainland China using its existing distribution network. This move reflects EZZ’s commitment to innovation and addresses growing consumer demand for quality nutrition, particularly in China.
Revolver Resources (ASX:RRR)
Revolver has identified several promising copper targets at its Osprey Copper Project in north-west Queensland. Recent geological analysis reveals strong potential for large-scale Mt Isa-style copper deposits. The company plans to conduct fieldwork to study the geology in the southern part of the Osprey site, and will use AI and geophysical methods in late 2024 to refine these targets. CEO Pat Williams said that the new findings suggest Osprey could be a significant copper discovery. The project shows all the necessary geological features for a major copper deposit, and upcoming exploration will focus on drilling these promising targets, he said.
Amplia Therapeutics (ASX:ATX)
Amplia announced that a fourth patient in its ACCENT trial for advanced pancreatic cancer has shown a confirmed reduction in tumour size. This adds to the three responses reported on July 25, bringing the total to four. The trial requires six confirmed responses from the first cohort of 26 patients to proceed with enrolling an additional 24 patients. The ACCENT trial is testing narmafotinib combined with standard chemotherapy. With four responses now confirmed, only two more are required to move forward. Amplia plans to complete an interim analysis by the end of the quarter.
At Stockhead we tell it like it is. While EZZ Life Science is a Stockhead advertiser, it did not sponsor this article.
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