Global stocks fall in worst week since March: Aus shares to open lower

Global stocks fell on Friday, capping their worst week since March as investors in the US and Europe fretted over the prospect of further interest rate increases and potential recession.

The Dow Jones Industrial Average fell 219.28 points, or 0.65 per cent, to 33,727.43. The S&P 500 slid 0.77 per cent to 4,348.33. The Nasdaq Composite closed lower by 1.01 per cent to end at 13,492.52.

All three major averages broke multi-week winning streaks. The S&P 500 lost about 1.4 per cent, ending five consecutive weeks of gains. The Nasdaq dropped 1.4 per cent, snapping an eight-week win streak and posting its worst weekly performance since March. The Dow was nearly 1.7 per cent lower, ending a three-week positive run.

The pullback was broad-based, with more than 400 stocks in the S&P 500 trading in negative territory. Information technology was among the biggest laggards, down more than 1 per cent.

Notably, shares in Nvidia, a major artificial-intelligence beneficiary, were down 1.9 per cent.

Meanwhile, Goldman Sachs shares declined after CNBC reported the investment bank likely faces a large writedown for its 2021 acquisition of fintech firm GreenSky. The stock was down 1.5 per cent, weighing on the Dow.

In addition, over the weekend, it has been reported that Goldman Sachs and JPMorgan Chase & Co are both reducing their investment banking workforce globally, with JPMorgan cutting around 40 bankers in North America and Goldman Sachs cutting managing directors worldwide, as both firms respond to a slowdown in dealmaking.

In contrast, CarMax shares jumped 10 per cent after the used car retailer exceeded first-quarter revenue expectations.

The FTSE All-World index, which tracks the largest companies globally, slid 1 per cent, bringing its weekly fall to 2.2 per cent — its worst performance since the US regional banking crisis began in March with the collapse of Silicon Valley Bank.

The Stoxx 600 slipped 0.3 per cent on Friday and 2.6 per cent over the week. The moves followed a week of hawkish signals from policymakers in the US and Europe, as central banks prioritised their battle against stubbornly high inflation even as several economic indicators pointed to a slowdown on both sides of the Atlantic.

On the EU front, France and Germany, along with other EU countries, are pushing for aluminium to be classified as a "strategic" raw material, which would result in faster permit procedures and increased financing for the industry, aiming to enhance the EU's green economy and reduce reliance on countries such as China.

Overall, all US sectors closed lower on Friday. Utilities was the worst, whilst Communication Services recorded the fewest gains.

Futures

The SPI futures are pointing to a 0.23 per cent fall

Currency

One Australian dollar at 7:20 AM was buying 66.81 US cents.

Commodities

Gold has gained 0.31 per cent. Silver has dropped 0.53 per cent. Copper has lost 2.18 per cent. Oil is down 0.50 per cent.

Figures around the globe

Across the Atlantic, European markets closed lower on Friday. London’s FTSE fell 0.54 per cent, Frankfurt lost 0.99 per cent while Paris closed 0.55 per cent lower.

Turning to Asian markets, Tokyo’s Nikkei lost 1.45 per cent, Hong Kong’s Hang Seng lost 1.71 per cent and China’s Shanghai Composite was closed due for the Dragon Boat Festival.

On Friday, the Australian sharemarket closed 1.34 per cent lower at 7,099.23.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

Disclaimer

The views, opinions or recommendations of the commentators in this presentation are solely those of the author and do not in any way reflect the views, opinions, recommendations, of Sequoia Financial Group Limited ABN 90 091 744 884 and its related bodies corporate (“SEQ”). SEQ makes no representation or warranty with respect to the accuracy, completeness or currency of the content. Any prices published are accurate subject to the time of filming and shouldn’t be relied upon to make a financial decision. Commentators may hold positions in stocks mentioned and companies may pay FNN to produce the content at times. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian Financial Services Licensee before making investment decisions. To the extent permitted by law, SEQ excludes all liability for any loss or damage arising in any way including by way of negligence.
Copyright 2023 – Finance News Network