Following a strong lead from Europe, with the German DAX and UK FT100 gaining 0.80% and 1.37% respectively, US equities started the trading session strongly, only to quickly reverse and sell off for much of the day.
The S&P500 set a low of 3794 around midday, before recovering into the close. At the conclusion of the day’s trade, the S&P500 was down 0.40% at 3824.14, the Dow Jones was largely flat (-0.03%), while the tech-heavy Nasdaq100 ended 0.70% lower at 10.862.
Equities were weighted down by Tesla (TSLA), which declined more than 12% for the session, taking the losses to around 66% since the September highs, as the chart below demonstrates. Prices fell after the company missed their estimates for deliveries in the fourth quarter. Amongst the other decliners was Apple (AAPL), down 3.74%, off the back of weakening demand for their products, while the energy sector as a whole shed -3.63%, due to weaker crude oil and natural gas prices. The likes of ConocoPhillips (COP), Exxon Mobile (XOM), and Chevron (CVX), all down in the vicinity of 3-4%. There were pockets of green, most notable amongst communications and industrials, with Paypal (PYPL, +4.72%) and Meta Platforms (META, +3.66%) the top gainers from the S&P100.
Tesla Inc.
The yield on the US 10 yr. bond declined to 3.769%, following several weeks of gains, with traders looking towards the Jobs Report later this week, with Bloomberg consensus currently anticipating a gain of 200K change in nonfarm payrolls. The US employment picture remains a key focus for the Federal Reserve, in terms of their interest rate policy, with a pause in rate hikes unlikely while jobs growth remains strong.
*Note: These prices are based on futures and/or CFD pricing and may therefore differ slightly from spot pricing.
To commodity markets, and energy was weak on Tuesday, led by a more than 10% decline in the price of natural gas, which traded below US$4, a 12-month low, and down close to 70% from the August highs. Crude oil futures declined 3.89% to close at US$77.14 a barrel. Precious metals were higher, led by platinum (+1.18%), while gold closed 0.83% at US$1.839 an oz, higher following a choppy session. Much of the remainder of the commodity complex was lower, with gains, softs, and industrial metals all lower.
To the currencies, and the US Dollar was stronger across the board, gaining 1.013% against the Euro, 0.65% against the British pound, and 1.13% against the Australian dollar, which closed at 0.6725.
Looking to the Australian equity market, and ASX200 SPI futures gained 59 points (0.86%) in overnight trading, suggesting a stronger start to trading on Wednesday. On Tuesday, gold stocks performed well, with De Grey Mining (DEG) the top performer from the ASX200, gaining 5.06%, while Gold Road Resources (GOR), Evolution Mining (EVN), and Northern Star (NST) all higher as well. DEG looks promising from a charting perspective, with prices breaking out of a ‘bullish flag’, following several months of upward trending price action.
De Grey Mining
This article was written by Oliver Gordon, Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via info@rivkin.com.au or by phoning +612 8302 3632.
