ASX set for a poor finish to the week as tech stocks lead Wall Street lower again

January 14, 2022 - 6 days ago
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The Australian share market is expected to open lower as a retreat in U.S. technology companies led a sell-off on Wall Street Thursday amid the prospects for higher interest rates.

The ASX futures tumbled -25 points or -0.3% to 7,341, while our local currency, the Australian Dollar, is currently buying US$0.7178 (as of writing).

At the finishing bell, on the New York Stock Exchange (NYSE), the blue-chip Dow Jones Industrial Average dropped -176.70 points, or -0.5%, to 36,113.62.

The broad-based Standard & Poor’s 500 Index fell -67.32 points, or -1.4%, to 4,659.03, while the rich-tech Nasdaq Composite Index tumbled -381.58 points, or -2.5%, to 14,806.81, posting its lowest close since October.

Investors on Thursday examined data showing that the number of Americans filing first-time unemployment claims last week rose by 23,000 to 230,000, the U.S Labour Department said on Thursday.

Other data, the U.S. Labour Department said its producer-price index rose 0.2% in December from the prior month, the slowest pace since November 2020, while year-on-year 9.7%, its highest level on record, according to figures released Thursday.

The producer price index, which measures changes in the price of goods and services from a producer perspective, was expected to increase 9.8% last month.

The dollar index was flat at 94.80, while the yield on the benchmark 10-year U.S. Treasury note ticked down to 1.708% Thursday, from 1.724% Wednesday. It remains well above the 1.496% at which it finished 2021. Bond yields rise as prices fall.

Precious metals were mixed, with gold falling -0.3% to $1,821 per ounce, but silver adding +0.05% to $23.06.

Crude prices slipped, with Brent crude trading at $84.54 per barrel, down -0.1% and U.S. benchmark West Texas Intermediate crude lost -0.3% to $82.36.

Iron ore prices fell -2.3% at US$127.95 a tonne, while cryptocurrencies Bitcoin, the world’s largest cryptocurrency by market value, slipped -3% and is currently trading at US$42,600.0 (as of writing).

Based on the daily technical assessment of the S&P/ASX 200 (XJO), a weaker opening is foreseen, with the intraday support located at 7,420 (minor), with 7,385 lower.

The resistance is assessed from 7,460 (minor), with 7,505 located firmer above. Reassess from there.

Daily outlook on the benchmark S&P/ASX 200

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