The local share market has rebounded from an almost two-month low, despite losses on Wall Street overnight.
Meanwhile, the founder of cryptocurrency exchange FTX, Sam Bankman-Fried, has pleaded not guilty to defrauding investors, and a trial date has been set for October 2.
Here's how the trading day unfolded.
Disclaimer: this blog is not intended as investment advice.
Live updates
ASX jumps 1.6%, recouping yesterday's losses
By David Chau
The Australian share market has ended its day with strong gains, and managed to claw back all of yesterday's steep losses.
The ASX 200 index jumped 1.6% to close at 7,059 points, with almost every sector posting gains.
The US dollar was on the back foot after a steep spike overnight, with investors keenly awaiting minutes from the Federal Reserve's most recent meeting to gauge the path forward for interest rates.
"The market has made a pretty tentative start to the year ... [and] is still grappling with the notion of what we are going to see from the Fed this year," said Rob Carnell, head of ING's Asia-Pacific research.
"There are two camps out there and they are wrestling for dominance in terms of the view.
"Some days higher-for-longer wins some days higher-then-lower camp wins."
Minutes from the Fed's December meeting, when it cautioned rates may need to remain higher for longer, are due to be released later on Thursday morning (AEDT).
Markets are pricing in US rate cuts for late 2023, with fed fund futures implying a range of 4.25% to 4.5% by December.
The US dollar index, which measures the greenback against six other currencies fell 0.2% (after rising 1% overnight).
Coversely, the Australian dollar jumped 0.9 per cent, to 67.9 US cents (after dropping more than 1% overnight).
Oil prices steadied after diving 4% overnight, the largest daily decline in more than three months - weighed by weak demand data from China, a gloomy economic outlook and a stronger US dollar.
Brent crude was steady at $US82.13 a barrel.
Spot gold rose 0.3% to a six-month high of $US1,845 an ounce.
Oil stocks fall behind
By David Chau
Oil and gas stocks were today's worst performers, after a sharp fall in crude oil prices.
Woodside Energy (-2.4%), Viva Energy (-1.9%) and Santos (-1.7%) suffered the biggest losses on the benchmark stock index.
Banks and miners drive ASX higher
By David Chau
Today's best stocks were a mixture of:
- healthcare (Telix Pharmaceuticals, Imugene)
- technology (BrainChip)
- financial (Magellan Financial, Pinnacle Investment)
- gold (Silver Lake, Ramelius, Capricorn Metals)
The major banks and miners drove the Australian share market higher, including Commonwealth Bank (+2.1%), Westpac (+3.1%), ANZ (+2.7%), NAB (+1%), BHP (+1.6%), Rio Tinto (+1.7%) and Fortescue Metals (+2.8%).
Every sector up ... except energy
By David Chau
Nine out of every 10 stocks traded higher on the benchmark index (nearly all of them).
Industrials and financials were some of today's best performing sectors.
Energy was the only sector to go backwards, weighed down by a big fall in oil prices overnight.
New bail condition imposed on Sam Bankman-Fried
By David Chau
FTX founder Sam Bankman-Fried pleaded not guilty to fraud charges on Tuesday (local time) at a federal court in Manhattan.
At the hearing, US District Judge Lewis Kaplan imposed a new bail condition, saying Bankman-Fried cannot access the assets of FTX or Alameda Research (a hedge fund, which was the 'sister company' of FTX).
That came after federal prosecutor Danielle Sassoon accused Bankman-Fried of seeking to transfer assets to an unnamed foreign country that he thought would be "more lenient."
She said prosecutors were also probing reports late last month that funds were transferred out of Alameda cryptocurrency wallets, though she said there was not evidence Bankman-Fried executed those transactions.
Mark Cohen, Bankman-Fried's lawyer, said his client "did not make" the Alameda transfers.
Referring to the accusation that Bankman-Fried sought to transfer money overseas, he said his client had sought to comply with a court order in the Bahamas, which last month temporarily seized some FTX assets.
In November, Securities Commission of the Bahamas (SCB) directed Bankman-Fried and Gary Wang (FTX's former chief technology officer) to transfer assets under their control, the SCB's executive director Christina Rolle said in an affidavit, filed in the Bahamas Supreme Court.
The SCB — the Caribbean nation's financial regulator — did not immediately reply to a request for comment.
The Bahamas has appointed liquidators to wind down FTX's international trading business.
What led to FTX founder being charged with fraud?
By David Chau
Sam Bankman-Fried rode a boom in the value of bitcoin and other digital assets to build a net worth of an estimated $US26 billion and become an influential political donor in the United States.
His company, the cryptocurrency exchange FTX, collapsed in early November after customers rushed to withdraw their digital assets.
However, FTX did not have enough funds to meet all those withdrawals. This 'bank run' was triggered by reports that FTX had misused its client funds.
It allegedly did this by secretly transferring the funds into a related company (Alameda Research), which was using them to make risky and speculative investments.
FTX's client funds were also used to buy property for Bankman-Fried and his staff in the Bahamas, and make political donations in the US - to both Democrats and Republicans.
The crypto exchange filed for bankruptcy on November 11, wiping out Bankman-Fried's fortune. He later said he had $US100,000 in his bank account.
He was arrested and extradited last month from the Bahamas, where he lived and where the FTX was based.
Since his release on a $US250 million bond on December 22, Bankman-Fried has been subject to electronic monitoring and required to live with his parents – Joseph Bankman and Barbara Fried (both are professors at Stanford Law School in California).
Australian shares climb 1.2% at midday
By David Chau
The share market has lifted even further in midday trade, with almost every sector (except energy) trading higher.
The ASX 200 was up 1.2% to 7,030, by 12:25pm AEDT.
Bucking the weak sentiment on Wall Street, local tech stocks led the gains with ASX-listed shares of Block jumping 4.2%.
The price of gold jumped to $US1,840 an ounce, its highest level in six months.
That helped boost local gold miners like Newcrest Mining (up 1.5%) and Northern Star Resources (up 2.4%).
However, energy stocks fell after oil prices tumbled overnight on concerns about weaker demand from China and a gloomy outlook for the global economy.
Shares of Woodside Energy and Santos slipped 1.8 and 0.6 per cent respectively.
Tesla fined for exaggerating driving range of EVs
By David Chau
South Korea's antitrust regulator says it will impose a 2.85 billion won ($3.28 million) fine on Tesla for failing to tell its customers about the shorter driving range of its electric vehicles (EVs) in low temperatures.
The Korea Fair Trade Commission (KFTC) said that Tesla had exaggerated the "driving ranges of its cars on a single charge, their fuel cost-effectiveness compared to gasoline vehicles as well as the performance of its Superchargers".
The driving range of the US EV manufacturer's cars plunge in cold weather by up to 50.5% versus how they are advertised online, the KFTC said in a statement.
You can read the full story here:
RBA tipped to cut interest rates in 2023 as house prices fall
By David Chau
What will regulators and governments do if the housing market tanks?
History shows us that they typically intervene before that happens.
If the unemployment rate shoots up, and people dramatically pull back spending, the Reserve Bank will start cutting interest rates aggressively.
There's no signs of that yet. At its board meeting last month, the RBA said it expects inflation will have peaked at about 8% over the year to the December quarter.
It will be waiting for evidence of that as it works to bring inflation back with its target band of 2 to 3%.
You can read Nassim Khadem's full analysis here:
ASX rebounds 0.8% in early trade
By David Chau
Australian shares have started the day with solid gains, as investors 'bought the dip' and helped the market rebound from yesterday's heavy losses.
The ASX 200 was up 0.8% to 7,005 points, by 10:35am AEDT.
Nine out of every 10 stocks on the benchmark index posted gains (so that's most of them).
Some of today's best performers were healthcare stock Imugene (+6.9%), lithium producer Sayona Mining (+5.3%), fund manager Magellan Financial (+5.1%), along with tech companies Novonix (+4.3%), Block (+4%).
On the flip side, energy stocks experienced sharp losses after a 4% drop in oil prices overnight.
The weakest performers include Woodside Energy (-1.8%), Karoon Energy (-1.2%) and Viva Energy (-0.9%).
The Australian dollar was buying 67.2 US cents, after a 1.2% drop overnight.
It was mainly due to a stronger greenback. The US dollar index jumped 0.9% to 104.64.
This comes ahead of the US Federal Reserve releasing the minutes of its latest meeting on Thursday morning (AEDT), with expectations they will signal more policy tightening is in store.
FTX founder pleads not guilty in 'epic' fraud case
By David Chau
Sam Bankman-Fried has pleaded not guilty to criminal charges that he cheated investors in his now-bankrupt FTX cryptocurrency exchange and caused billions of dollars in losses, in what prosecutors have called an "epic" fraud.
He entered his plea in Manhattan federal court where he faces eight criminal counts, including wire fraud and money laundering conspiracy.
The 30-year-old ex-mogul is accused of looting FTX customers' deposits to support his Alameda Research hedge fund, buy real estate and donate millions of dollars to political causes.
"Customer funds were also used and laundered through political donations, charitable donations and a variety of venture investments," Danielle Sassoon, a federal prosecutor, said at the hearing.
Sassoon suggested that the government has a deep well of evidence against Bankman-Fried, saying prosecutors will turn over hundreds of thousands of documents in coming weeks to the defense.
US District Judge Lewis Kaplan on Tuesday set an October 2 date for trial, which Sassoon said could last four weeks.
The government has already secured guilty pleas from two former top associates of Bankman-Fried's - former Alameda chief executive Caroline Ellison and former FTX chief technology officer Gary Wang - who are cooperating with prosecutors and may testify at trial.
The Massachusetts Institute of Technology graduate could face up to 115 years in prison if convicted. He has previously acknowledged making mistakes at FTX but said he does not believe he has criminal liability.
Tesla shares plunge on weaker demand
By David Chau
Shares of Tesla dropped 12.2% overnight, which knocked nearly $US50 billion off its market value.
That's roughly equal to the market value of its rival Ford Motor Co, which sold three times as many cars as Tesla last year.
It was worst performing stock on the S&P 500, as Tesla shares fell as low as $US104.64 a share, its lowest level since August 2020.
The sell-off came after Tesla missed market expectations for December-quarter deliveries — despite shipping a record number of vehicles.
Tesla delivered 405,278 vehicles during the quarter (short of analysts' estimates of 431,117).
It deliveries rose by 40% in 2022, though that fell below the 50% annual target set by CEO Elon Musk.
The result "came at the cost of higher incentives, suggesting lower pricing and margin," brokerage JP Morgan said in a note, lowering its price target by $US25 to $US125.
The automaker plans to run a reduced production schedule in January at its Shanghai plant, extending the lowered output it began in December into 2023, Reuters reported.
Tesla's market value has declined by about $US370 billion since Mr Musk closed the deal to buy social media firm Twitter.
"You have so many things working against the stock. One obviously is Musk's involvement in Twitter," said Dennis Dick, market structure analyst and trader at Triple D Trading.
Apple's market value falls below $US2 trillion
By David Chau
For the first time since March 2021, Apple's stock market value has fallen below $US2 trillion ($2.97t).
Shares of the iPhone maker dropped 3% (to $US125.07) overnight, and it was one of the biggest drags on the US stock market.
At its peak, Apple was worth more than $US3 trillion. It was also the first US company to reach that milestone.
It comes as analysts from Exane BNP Paribas downgraded the tech giant to "neutral" from "outperform", and slashed their price target to $US140 (from $US180).
BNP also slashed their 2022-23 forecasts for iPhone shipment targets (down 8.6% to 224 million units).
This reflects supply chain issues from its China-based manufacturer Foxconn, and consumers cutting back spending on high-end phones.
"They (Apple) tend to skew to the high-end consumer device customer but even that demographic might be being affected by the high price of everything," Bokeh Capital Partners' Kim Forrest said.
At Apple's current stock price, the company is worth $US1.98 trillion, just ahead of Microsoft (currently valued at $US1.78t).
Wall St drops on first trading day of 2023
By David Chau
The main indices on the US stock market have ended their day in negative territory, with Apple and Tesla being the main drags.
The Dow Jones was flat at 33,136 points.
The S&P 500 slipped 0.4% to close at 3,824, while the Nasdaq Composite lost 0.8 per cent, and finished at 10,387.
Investors were also worried about the US Federal Reserve's interest-rate hiking path, and are keenly awaiting the minutes of its December meeting (which will be out on Thursday at 6am AEDT).
Markets will watch for signs of how concerned the Fed is about persistent inflation and its thoughts on the labour market.
Wall Street ended 2022 with its steepest annual losses since 2008. This was largely due to the Fed lifting rates at its fatest pace the 1980s to stamp out decades-high inflation.
"Even though the calendar has changed, a lot of the main issues for the market have not, specifically with the Federal Reserve tightening monetary policy as it's still concerned about inflation," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.
"We're in a bear market. Negative is the default reaction to everything.
"Until the Fed really changes their tone, it's an uphill battle for the market."
ASX to open higher, despite Wall St losses
By David Chau
The local share market is set to rebound from yesterday's significant losses (which took the ASX 200 to its lowest level in two months).
However, the Australian dollar was buying 67.26 US cents, after dropping by a hefty 1.1% overnight.
It's also weaker against the Japanese currency, having dropped 1.4% to 88.06 yen.
Here's a snapshot of how markets are looking at 7:30am AEDT:
- ASX futures: +0.8% to 6,946 points
-
Wall Street: Dow Jones (-0.3%), S&P 500 (-0.6%), Nasdaq Composite (-0.8%)
- Europe: FTSE (+1.4%), DAX (+0.8%), Stoxx 600 (+1.2%)
- Brent crude oil: -4.3% to $US82.28 a barrel
- Gold: +0.8% to $US1,838 an ounce
Losses on US markets were led by a 14.7% tumble in electric-vehicle maker Tesla, after it missed Wall Street estimates for quarterly deliveries.
Apple dropped 4.3% to its lowest since June 2021, following a rating downgrade due to production cuts in China.
Meanwhile, a stronger US greenback led to oil prices falling sharply.
Oil market also took a beating from concerns about slowing global economic growth, especially after the latest data from China showed its factory activity shrank in December.
