Australian shares are poised to open lower, extending losses after the RBA made clear it is not done lifting interest rates. US stocks were lower as investors await Federal Reserve chairman Jerome Powell.
Powell is scheduled to have a conversation with David Rubenstein, chairman of the Economic Club of Washington at 12.40pm in Washington (4.40am AEDT).
ASX futures were down 30 points or 0.4 per cent to 7401 near 3.10am AEDT.
Wednesday’s reporting scheduled: Amcor (AMC) | Boral (BLD) | BWP Trust (BWP) | Dexus Industria (DXI) | Suncorp (SUN) | WOTSO (WOT) | Alliance Aviation (AQZ).
The local currency was 0.5 per cent higher; the Bloomberg dollar spot index slipped 0.2 per cent.
On bitstamp.net, bitcoin was 0.9 per cent lower to $US22,925 at 3.10am AEDT.
The yield on the US 10-year note was 2 basis points lower to 3.62 per cent at 11.08am in New York.
In a tweet, Schwab’s Kathy Jones said: “Powell today: Will he reinforce the disinflation message or worry about letting up too soon? How wedded is he/Fed to the Phillips Curve view of the job market? Are they still worried about inflation expectations? Any update on QT?”
On Wall Street, shares were mixed with the Dow lagging amid weakness in Home Depot, Nike and Verizon. The S&P 500 was little changed. The Nasdaq edged higher.
No local data. Reporting schedule: Amcor (AMC) | Boral (BLD) | BWP Trust (BWP) | Dexus Industria (DXI) | Suncorp (SUN) | WOTSO (WOT) | Alliance Aviation (AQZ).
Overseas data: Japan December current account; US December consumer credit; Fed governor Chris Waller speaks on the economic outlook at Arkansas State University
‘Painful squeeze’ as interest rates head to 4pc The Reserve Bank of Australia has delivered a ninth straight interest rate rise to 3.35 per cent and indicated 4 per cent-plus may be needed to tame inflation.
Chanticleer: RBA governor Phil Lowe’s tough message stuns the markets A hawkish RBA means Australia is headed for tough economic times that will require the central bank to cut rates aggressively into 2024.
ASX futures down 30 points or 0.4 per cent to 7401 near 3.10am AEDT
In a note, Goldman portfolio strategists led by Matthew Ross said despite widespread fears of a ‘consumption cliff’, the household sector has been largely resilient outside housing.
“Earnings sentiment has eased from the post-reopening highs, but remains more supportive than the trend from other economies that re-opened sooner. Consensus FY23 EPS forecasts have been revised lower by 4% since mid-2022 (less than half the cut to the S&P500).”
Among Goldman’s views:
Goldman also said payout ratios remain below pre-COVID levels despite a strong recovery in earnings suggesting some upside risk to dividends.
KKR & Co passed $US500 billion in assets under management during the fourth quarter even as earnings fell 41% on sluggish asset sales.
The New York-based firm raised $US16 billion of new capital in the quarter to reach $US504 billion in AUM, it said in a statement. Distributable earnings fell to $US822 million, or 92 cents a share, from $US1.4 billion, or $US1.59, a year earlier. That beat the 85-cent average estimate of 14 analysts surveyed by Bloomberg.
Goldman Sachs Group raised $US5.2 billion for a private equity fund that will buy early-stage companies that are typically small in size, a sign of confidence in an industry that’s confronting strong headwinds.
Goldman Asset Management’s West Street Global Growth Partners I exceeded its initial target and received $US3.7 billion from institutional and high net worth investors, according to a statement. It also got a significant commitment from the firm and its staff, it said.
Eurasian Resources Group Sarl, the mining firm backed by Kazakhstan, plans to spend $US1.8 billion doubling its African copper and cobalt output as it taps demand for metals needed for the green-energy transition.
The four-year expansion in the Democratic Republic of Congo comes after cobalt prices almost halved over the past year because of a supply glut.
A projected surge in demand for the battery material as more electric vehicles are made puts ERG in a strong position, according to chief executive officer Benedikt Sobotka.
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