In US economic data, the economy (as measured by GDP) grew by 3.2% in the year to September (survey: 2.9%). The Conference Board leading index fell by 1% in November (survey: -0.5%). The Kansas City Fed manufacturing index eased from -6 to -9 in December (survey: -7). Initial jobless claims rose by 2,000 to 216,000 last week (survey: 222,000).

European sharemarkets closed lower on Thursday, with investor sentiment souring on recession worries after solid gains in the previous session. Technology and auto shares both fell 2.5%. The continent-wide FTSEurofirst 300 index shed 0.9%. The UK FTSE 100 index slid 0.4% after data showed that Britain’s economy (GDP) contracted by 0.3% in the September quarter compared with a previous estimate of -0.2% (survey: -0.2%).

US sharemarkets tumbled on Thursday as data showing a resilient US economy fuelled worries that the US Federal Reserve would stick to its aggressive policy tightening path. Rate-sensitive shares of Apple (-2.4%), Microsoft (-2.6%) and Amazon.com (- 3.4%) all fell. A gloomy outlook for Micron Technology (-3.4%) weighed on chipmaker peers Nvidia (-7%) and Advanced Micro Devices (-5.6%). Tesla shares shed 8.9% after the automaker offered US$7,500 discounts on some of its vehicles due to demand concerns. CarMax shares dropped 3.7% after the used
car retailer missed profit and revenue expectations. At the close of trade, the Dow Jones index fell by 349 points or 1.1% after being down 803 points earlier in the session. The S&P 500 index lost 1.5% and the Nasdaq index shed 233 points or 2.2%.

US government bonds were mixed on Thursday after data showed the US economy grew at a faster pace than previously thought last quarter. The US Treasury sold US$19 billion worth of 5-year Treasury Inflation-Protected Securities (TIPS) at a yield of 1.504% into weak demand. US 10-year Treasury yields were steady near 3.68%. But US 2-year Treasury yields rose by around 6 points to near 4.28%.

Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.0655 to lows near US$1.0572 and was near US$1.0595 at the US close. The Aussie dollar dropped from highs near US67.66 cents to lows near US66.49 cents and was near US66.65 cents at the US close. And the Japanese yen eased from 131.71 yen per US dollar to JPY132.67 and was near JPY132.35 at the US close.

 

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Global oil prices fell by up to 1.5% on Thursday in choppy trade. The impact of tighter US crude stocks due to a winter storm was outweighed by fears that US Federal Reserve interest rate hikes and China’s rising Covid-19 cases would dent demand. The Brent crude oil price fell by US$1.22 or 1.5% to US$80.98 a barrel. And the US Nymex crude oil price dipped US80 cents or 1% to US$77.49 a barrel.

Base metal prices were mixed on Thursday. Copper slid 1.5% as an accelerating wave of coronavirus infections in China, the biggest consumer, eroded demand and solid US economic data suggested that interest rates may remain higher for longer, stifling growth. But aluminium was up by 0.8%.

The gold futures price fell by US$30.10 an ounce or 1.6% to US$1,795.30 an ounce. Spot gold was trading near US$1,791 an ounce at the US close. Iron ore futures dipped US31 cents a tonne or 0.3% to US$110.43 a tonne.

Ahead: In Australia, private sector credit data is scheduled. In the US, data on personal income and spending, inflation, durable goods orders and new home sales are all released with the University of Michigan consumer confidence index.

Originally published by CommSec