Markets fall on recession fears as Musk votes himself out of Twitter

 

Stocks fell Monday as recession fears mounted and investors worried time is running out for a year-end rally.

The Federal Reserve, European Central Bank and the Bank of England each pushed interest rates higher by ½ of 1 percent last week, a step down in the previous pace of increases. However, they stood firm on their plans to continue their attempts to slow rising prices, with the ECB saying “inflation remains far too high”. Their warnings that further interest rate rises are needed to bring record inflation under control sent global stock markets lower last week.

Investors will also be watching for a few earnings reports due later in the week. FedEx and Nike are both scheduled to report earnings results on Tuesday after market close. As recession fears mount, earnings results will become more of a focus.

The Dow Jones Industrial Average shed 0.49 per cent. The S&P 500 fell 0.90 per cent to 3,817.66, and the Nasdaq Composite shed 1.49 per cent to 10,546.03, weighed down by shares of Amazon, which slipped 3.35 per cent.

Stocks are set to round out a dismal monthly performance in December after two consecutive negative weeks. So far, the Dow is set to end the month more than 3 per cent lower, and the S&P 500 is down nearly 4.5 per cent in the same timeframe. The Nasdaq Composite is on track to decline 5.4 per cent this month.

It wouldn't be a morning note without further Elon Musk commentary as Twitter users have voted for Elon Musk to step down as the social network’s chief executive, adding to turmoil over the future of the San Francisco-based company. The billionaire entrepreneur, who bought Twitter for $44bn in October, launched a poll via the platform on Sunday asking whether he should remain at the helm, adding: “I will abide by the results of this poll.” As owner, Musk remains on the hook for $1bn in annual interest payments after loading the company with $13bn of debt to help fund his acquisition of the business

The SEC has cracked down on financial influencers who have been accused of running a ‘pump and dump’ scheme The defendants used social media to amass a large following of novice investors and then took advantage of their followers by repeatedly feeding them a steady diet of misinformation. The conspirators used podcasts and social media to talk up stock prices to their large followings, then sold their shares, according to court filings by the S.E.C. and the Justice Department.

Across the sectors, energy was the only outperformer with new energy thematics like hydrogen, EV charger and solid state battery stocks the worst performers

Futures

The SPI futures are pointing to a 0.4 per cent fall.

Currency

One Australian dollar at 8:10 AM has weakened compared to the US dollar yesterday buying 66.95 US cents (Mon: 67.05 US cents).

Commodities

Iron ore futures are pointing to a 0.8 per cent fall. Iron ore is 3.1 per cent lower at US$109.20 tonne.
Gold lost 0.2 per cent. Silver fell 0.8 per cent. Copper shed 0.1 per cent and oil gained almost 2 per cent.

Figures around the globe

Across the Atlantic, European markets closed higher. Paris added 0.3 per cent, Frankfurt gained 0.4 per cent and London’s FTSE closed 0.4 per cent higher.

In Asian markets, Tokyo’s Nikkei lost 1.1 per cent, Hong Kong’s Hang Seng fell 0.5 per cent and China’s Shanghai Composite closed 1.9 per cent lower.

Yesterday, the Australian sharemarket fell 0.2 per cent to close at 7134.

Ex-dividends

Metcash (ASX:MTS) is paying 11.5 cents fully franked

Dividends payable

Westpac Banking Corp (ASX:WBC)
SSR Mining Inc (ASX:SSR)

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

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