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Wall Street closed mixed across the key indices on Friday, pushing the S&P500 into correction territory as the index is now down 10.3% since its 2023 peak in July. The Dow Jones fell 1.12%, and the S&P500 lost almost half a percent, but the Nasdaq rose 0.38% on Friday buoyed by Amazon jumping over 6% on better-than-expected earnings and revenue for the third quarter.

Investors in the US have assessed disappointing earnings results against economic uncertainty which have led to the S&P500 and Nasdaq now entering correction territory. For the trading week last week, all three key indices lost of 2% each. US equities were also pressured on Friday by investor fears of further interest rate hikes after U.S. GDP data showed the economy grew by 4.9% in the third quarter which well exceeded estimates.

Over in Europe, markets in the region closed lower as investor sentiment remains shaky on geopolitical tensions and economic instability. The STOXX600 fell 0.8%, weighed down by healthcare stocks falling 2.9, while Germany’s DAX lost 0.3%, the French CAC fell 1.36% and, in the UK, the FTSE100 shed 0.86% on Friday. NatWest shares fell 11% on Friday after the bank reported third quarter results that showed net interest margin declining.

Locally on Friday, the ASX200 rose 0.21%, but for the week the ASX200 fell 1.07% as investor fears of an RBA rate hike on Melbourne Cup Day rose on the back of stronger-than-expected CPI data released earlier last week. On Friday, consumer staples stocks did most of the heavy lifting to close 1.33% higher driven by Endeavour Group and Coles Group.

ResMed shares fell 4% on Friday after the healthcare company’s September quarter update outlined higher costs further dampened the company’s margins, while Silver Lake Resources and Champion Iron rose 7.7% and 6.9% respectively on Friday.

What to watch today:

• Ahead of the local trading session here in Australia, the SPI futures are expecting the local market to open the first trading session of the new week down almost 1% following the turbulence on Wall Street on Friday.
• On the commodities front this morning, oil is up 2.18% at US$85.03/barrel, gold is up 1.08% at US$2006/ounce and iron ore is flat at US$120.50/tonne.
• We will be keeping a close eye on the retailers as Australia’s retail sales data for September is out at 10:30am AEDT with consensus expecting a rise of 0.3% from a 0.2% rise in August. Any slowdown in consumer spending may see further weakness in consumer discretionary stocks especially following some disappointing quarterly results out of retailers over the last week.
• AU$1.00 is buying 63 US cents, 94.79 Japanese Yen, 52 British Pence and NZ$1.09.

Trading Ideas:

• Bell Potter has downgraded the rating and price target on Clean Seas Seafood (ASX:CSS) from a buy to a hold and with a 12-month price target of 47cps, down from 60cps, following commentary made at the company’s AGM and on the release of a trading update. Clean Seas highlighted a more sombre trading update than Bell Potter expected including 1Q24 sales volume down 1% and frozen inventories up 44% YoY which is a trend Bell Potter would like to see reverse over the remainder of FY24. Average selling prices were also down 2% relative to average 2H23 pricing.
• And Bell Potter has increased the 12-month price target on Fortescue Metals Group (ASX:FMG) from $15.53 to $16.21 and maintain a sell rating on the mining giant following the release of the company’s September quarter trading update including iron ore shipments and cash costs missing expectations, and net debt increasing due to the distribution of dividends. The price target increase is due to favourable outlook for iron ore prices and foreign exchange forecasts.