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US stocks end lower on oil fears, eyes on RBA

Tuesday, 2 Aug 2016 07:00:25 | Thuy Ong

US stocks fell on oil glut worries, while local shares are expected to follow. (AFP: Getty Images/Spencer Platt)

Wall Street has closed lower overnight, retreating from record highs as US crude fell below $US40 a barrel for the first time since mid-April, dragging oil companies with it.

Markets at 7:52 am (AEST):

  • ASX SPI 200 futures -0.4pc to 5,525
  • AUD: 75.3 US cents, 57.1 British pence, 77.1 Japanese yen, 67.5 euro cents, $NZ1.051
  • US: Dow Jones -0.2pc to 18,45, S&P 500 -0.1pc to 2,171, Nasdaq +0.4pc to 5,184
  • Europe: FTSE 100, -0.5pc to 5,694, German DAX -0.1pc to 10,331, Paris CAC 40 -0.7pc to 4,409
  • Commodities: West Texas Crude -3.6pc to $US40 a barrel, iron ore +2.9pc to $US60.50 a tonne, gold +0.2pc to $US1,353 an ounce

Oil prices tumbled on heightened worries of an oil glut, which has put pressure on global stock market prices.

Shares in Exxon and Chevron dropped 3.5 per cent and 3.3 per cent each, dragging the S&P 500 and Dow Jones indices down with it.

The technology-heavy Nasdaq bucked the broader trend to end higher, helped by technology stocks including Apple and Alphabet, which jumped 1.8 per cent and 1.2 per cent respectively.

The local share market is expected to follow global leads lower, with the futures ASX SPI 200 index pointing to a muted start.

Meanwhile, investors will also eye the Reserve Bank of Australia (RBA), which will meet today.

Last week's highly anticipated inflation figures failed to deliver a decisive case for another interest rate cut, and markets are pricing in a 64 per cent chance of easing to 1.5 per cent.

"It's going to be a very interesting decision in what will be Governor Glenn Stevens' second last in the chair, stepping down September 17," wrote David de Garis, senior economist at NAB in a note to clients.

"As we've said now on several occasions, last week's CPI was right in line with RBA expectations."

Today's agenda:

Australia:

  • RBA decision
  • International trade, a $2 billion deficit forecast for June
  • Building permits, a rebound tipped after May decline for June
  • Home prices, CoreLogic RP data series
  • Consumer confidence, weekly reading from ANZ/Roy Morgan
  • Navitas FY result, NPAT of $90m forecast
  • Seven West Media FY result

Global:

  • US: Personal spending and income for June both expected to rise
  • Japan: Abe Government to announce 28 trillion yen fiscal stimulus package

AustraliaPlus


 

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