ASX is set for an uneasy start – U.S. stocks post their worst half in 50 years

July 1, 2022 - 2 months ago

The Australian share market is set for an uneven opening Friday after U.S. stocks on Wall Street racked up more losses as the market closed out its worst quarter since the onset of the pandemic in early 2020.

The Australian SPI 200 futures contract managed to eke out a +3 point gain, or +0.05%, at 6,464, while our local currency, the Australian dollar, is currently buying US$0.6898 (as of writing).

Wall Street stocks fell on Thursday, a fitting end to a bruising first half of 2022, with the broad-based Standard & Poor’s 500 Index now down -20.6% in the first six months of this year, posting its worst half since 1970, as recession concerns that are fuelled by the U.S. Federal Reserve’s aggressive monetary tightening.

The S&P 500 entered a bear market earlier in June.

Meanwhile, the Dow has fallen -15.3%, and the Nasdaq lost -29.5% in the first six months of 2022.

At the finishing bell, on the New York Stock Exchange (NYSE), the blue-chip Dow Jones Industrial Average tumbled by -253.88 points, or -0.8%, to 30,775.43.

The broad-based Standard & Poor’s 500 Index finished down -33.45 points, or -0.9%, to 3,785.38, while the rich-tech Nasdaq Composite Index lost -149.16 points, or -1.3%, to 11,028.74.

In other markets, the US dollar index (US DXY), which tracks the greenback against a basket of its peers, rose by +0.1% to 104.40, while in the bond market, the yield on the benchmark 10-year U.S. Treasury note dropped to 2.5% to 3.015%. Yields climb when bond prices decline.

Precious metals remained weak, with spot gold declining by -0.8% to $1,805 and silver losing -3% to $20.22.

Crude prices slid as global oil benchmark Brent crude was trading at $114.90 for a -1.4% loss, while U.S. benchmark West Texas Intermediate (WTI) was at $106.20 – down -3%.

Iron ore prices tumbled by -1.5% to US$120.90 a tonne, while cryptocurrencies Bitcoin, the world’s largest cryptocurrency by market value, recorded its worst half of a year in history, falling by -72% in the January-June period.

In overnight trade, the Bitcoin briefly slid below $19,000.00 and is now down -3.5% to US$19,300.00 (as of writing).

Based on the daily technical assessment of the S&P/ASX 200 (XJO), a mixed opening is foreseen, with the intraday resistance now at 6,590 minor, with 6,650 seen above. Reassess from there.

Assessing the downside, the support is observed at 6,555 minor, with 6,500-10 located beneath. Reassess from there.

Daily outlook on the benchmark S&P/ASX 200