Good morning and welcome to the ABC’s finance blog! I’ll be your guide for the next few hours.
It looks like the ASX 200 is going to slip again when it opens for trading in a few hours.
But rest assured, it will be a very small drop compared to yesterday — when the Australian share market lost almost 2% of its value (or $59 billion, in dollar terms).
This morning, ASX futures are practically flat, as they’re down by just 0.1%.
The Australian dollar, meanwhile, has recovered slightly and is trading above 65 US cents.
It follows another downbeat day on Wall Street as investors continued to ‘sell down’ their holdings of companies like Nvidia (-1.8%), Microsoft (-2.7%), Amazon (-3.6%), Tesla (-1.2%) that have any remote connection with artificial intelligence (AI).
This led to Wall Street’s benchmark index, the S&P 500 falling for its fourth consecutive day. However, today’s loss of 0.4% is much lower compared to the past few days.
The Dow Jones Industrial Average and Nasdaq Composite, meanwhile, fell by 0.8% each.
European markets suffered even steeper losses, with Britain’s FTSE down 1.3% and the pan-European Stoxx 600 index dropping 1.8%.
Basically, investors are getting nervous ahead of tomorrow’s big day on the markets — as America’s most highly-valued company Nvidia will release its quarterly earnings.
With expectations so high, there’s a decent chance the AI chipmaker profit will report a multi-billion dollar profit that still manages to underwhelm investors.
America’s tech giants have spent huge amounts of money developing AI products. Investors are now questioning when they’ll be able to see a return on those investments, and whether they’re paying too much for shares in those companies (compared to the profits they’re reporting).
Anyway, go and grab a coffee, tea, cereal (or whatever you fancy). I’ll have some more updates by the time you get back. Enjoy!
