Behind the figures, everything revolves around the price of energy


U.S. stocks fell for a third straight day overnight, jeopardizing a summer rebound, as the Federal Reserve and other global central bankers continued to signal they would raise interest rates to crush the inflation despite the negative consequences for economic growth and, potentially, corporate profits.

All eyes are on Friday’s jobs report, but a high number would just mean more of the same rhetoric from the Fed, in terms of a commitment to cutting inflation

The latest comments came Tuesday from New York Fed President John Williams, who said. “I think with demand far outstripping supply, we need to get real interest rates…above zero. We need to have a somewhat restrictive policy to slow down demand, and we’re not there yet,” Williams told the Wall Street Journal.

Of course, inflation is not just a US problem, as year-to-year price changes impact the Eurozone as well as the UK and Japan. With UK inflation forecast rising fastest

Overnight, the S&P 500 fell 1.1%, the Nasdaq Composite lost 1.1%, while the Dow Jones Industrial Average slipped nearly 1%

Across the sector, energy was the worst performer as energy prices fell on Tuesday, with West Texas Intermediate futures, the US oil benchmark, falling more than 5%. Natural gas futures also fell.

And while Russia continues to weaponize Europe’s gas and oil supplies, Moscow currently earns an average of $20 billion a month from oil and gas exports, up 42% from a year ago, helping to offset Western sanctions.

However, energy price volatility is rocking energy suppliers and buyers. Disruptions at French nuclear and hydropower plants are adding to the pressure Russian gas shortages are putting on energy markets.

The European Energy Exchange was sufficiently alarmed to call an extraordinary meeting of its member board this week. This rejected a trade halt, while calling on EU states to bolster the strained finances of energy buyers. That stress was reflected in a call from German utility Uniper for another €4 billion bailout to keep the lights on. All of these price moves are fueling strong inflation forecasts for next year, heightening Western Europe’s doomsday mood.

Among the good news, China’s steel industry appears to be showing signs of improvement with output and profitability likely to rise in September as the world’s second-largest economy finally begins to respond to government stimulus efforts. Steel mills reported an increase in production in September as profit margins returned to positive territory and low inventory levels needed to be replenished. Note that Beijing is taking more steps to stimulate economic activity, including increasing financial support for infrastructure projects and cutting interest rates. That said, these new measures are not a cure for China’s struggling construction sector, but they should serve to boost confidence and activity.

Currencies

An Australian dollar weakened by around ½ cent against the US dollar yesterday, buying 68.57 US cents (Tuesday: 69.02 US cents), 58.83 pence sterling, 95.17 yen and 68.45 cents euro.

Goods

Iron ore futures point to a 1.7% decline.

Gold prices fell on Tuesday as investors positioned themselves for a period of high interest rates in the United States and elsewhere. Gold lost $13.40 or 0.8% to US$1,736 an ounce.

Silver was down $0.38 or 2.1% at US$18.29 an ounce.

Copper fell $5.95 or 1.7% to US$355.10 per pound.

Oil fell $5.37 or 5.5% to US$91.64 a barrel.

Futures contracts

SPI futures point to a 0.8% decline.

Numbers around the world

On the other side of the Atlantic, the European markets closed on a mixed note. Paris lost 0.2%, Frankfurt added 0.5% while London’s FTSE closed down 0.9%.

Asian markets closed on a mixed note. Tokyo’s Nikkei gained 1.1%, Hong Kong’s Hang Seng fell 0.4% and China’s Shanghai Composite closed down 0.4%.

Yesterday, the Australian stock market gained 0.5% to 6998.

Ex-dividends

There are 27 companies ready to trade without the right to a dividend.

Adacel Technologies (ASX:ADA) pays 3.25 cents unstamped
Australian ethics (ASX:AEF) pays 3 cents fully franked
Ashley Service Group (ASX: ASH) pays 3 cents fully franked
Accent group (ASX:AX1) pays 4 cents fully franked
Bega cheese (ASX:BGA) pays 5.5 cents fully franked
Blackmores (ASX: BKL) pays 32 cents fully franked
Carlton Investments (ASX:CIN) pays 58 cents fully franked
Effort (ASX:EDV) pays 7.7 cents fully franked
Hmm Group (ASX:HUM) pays 1.4 cents fully franked
IRESS (ASX:IRE) pays 16 cents 25 percent franked
McGrath (ASX: MEA) pays 1 cent fully franked
Income Metrics (ASX: WORD) pays 1.28 cents unstamped
Metrics Master (ASX:MXT) pays 1.11 cents unstamped
Naos Ex-50 (ASX:NAC) pays 1.1 cents fully franked
Global Browser (ASX: NGI) pays 4.3447 unstamped cents
NAOS Small Cap Opportunities Company (ASX: NSC) pays 1.05 cents fully franked
Oh ! Media (ASX:OML) pays 1.5 cents fully franked
OZ Minerals (ASX:OZL) pays 8 cents fully franked
Propel the funeral (ASX: PFP) pays 6.25 cents fully franked
Global Grp Partners (ASX:PGG) pays 0.9669 cents without postage
Pengana International Equity (ASX:PIA) pays 1.35 cents fully franked
Form Aust Corp (ASX:SHA) pays 2 cents fully franked
Servcorp (ASX:SRV) pay 10 cents unstamped
TABCORP Holdings (ASX:TAH) pays 6.5 cents fully franked
Treasure Wine Estate (ASX: TWE) pays 16 cents fully franked
Wesfarmers (ASX:WES) pays 100 cents fully franked
Woolworths Group (ASX: WOW) pays 53 cents fully franked

Dividends payable

There are 21 companies ready to pay eligible shareholders today.

Abacus property group (ASX:ABP)
Carindale Estate Trust (ASX:CDP)
Charter Hall Group Limited (ASX:CHC)
Charter Hall Retail Reit (ASX: CQR)
Elanor Commercial Property Fund (ASX: ECF)
Elanor Investors Group (ASX:ENN)
Elanor Commercial Real Estate Fund (ASX:ERF)
Fat Prophets Global Property Fund (ASX: FPP)
GDI property group (ASX: GDI)
Genworth Mortgage Insurance Australia Limited (ASX:GMA)
Growthpoint Properties Australia (ASX:GOZ)
GPT Group (ASX:GPT)
Kelly Partners Group Holdings Limited (ASX: KPG)
Liberty Financial Group (ASX:LFG)
Lowell Resource Fund (ASX:LRT)
Mirvac Group (ASX:MGR)
Plato Income Maximiser Limited. (ASX: PL8)
Scentre Group (ASX:SCG)
Shopping Centers Australasia Property Group (ASX:SCP)
Stockland (ASX: SGP)
Waypoint Reit (ASX: WPR)

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