On October 15, 2018, the US markets witnessed a downtrend which reflects that the indices were unable to carry on the advance witnessed on the last trading day of the past week. Broadly, the US indices witnessed significant downtrend on the back of tech stocks as well as higher yields. Yesterday, the downturn in the tech stocks were the primary reason that the indices ended on a weaker note. Dow Jones Industrial Average ended at 25,250.55 which implies a fall of 89.44 points or 0.35% intraday. Netflix (NASDAQ: NFLX) and Apple Inc. (NASDAQ: AAPL) fell primarily because of the tough actions taken by the brokers. Raymond James as well as Goldman Sachs reduced the target prices on Netflix. However, AAPL fell as the Goldman Sachs believes that the tech major could disappoint on the earnings because of the weaker demand in China.
What’s with Gold Prices Amid Higher Rates, Market Rout?
The prices of safe-haven asset, gold, witnessed the positive momentum on the back of the lower Asian markets as well as trade tensions which are being witnessed between the US and China. However, anticipation of the higher interest rates in the US have also fueled the upward trend in gold. As broadly anticipated, the sell-off witnessed in the global markets have diverted the attention of the market players towards gold which has, in turn, boosted gold prices. Generally, after the market crashes, the gold experienced the upward movement and is preferred by the global investors. Thus, investors are prompted to liquidate the equity holdings and deploy that capital in gold. The increasing geopolitical concerns have also positively impacted the prices of gold. Heightened geopolitical tensions dent the investors sentiments and they prefer deploying in gold. Newcrest Mining Limited (ASX: NCM) ended the session at A$20.550 per share which implies an intraday increase of A$0.660 or 3.318%.
A Quick Look at Australian Markets
Even though the Australian markets have marked an end to the session on a positive note, the investors are still in the dicey position when it comes to making investments in the Australian stock markets. The primary reason for this is the broader and macroeconomic view of the banking sector. The banking sector has been confronting several factors lately. On the top, the interim report of the Royal Commission is also weighing on the investors’ sentiments. If the additional rules and regulations hit the financial markets, there is a high probability of the weakening of the economic growth as it would restrict business and consumer lending.
Coming to the broader market, S&P/ASX200 ended the day at 5869.9 which implies an increase of 32.8 points or 0.6%. IPH Limited (ASX: IPH) ended the session at A$5.570 which implies a decline of 2.962%. However, Syrah Resources Limited (ASX: SYR) encountered the decline of 2.801% and closed at A$1.735 per share. The market also saw consumer discretionary sector being up by 1.8 per cent as compared to a meagre movement in ASX 200. In this space, gaming group Aristocrat Leisure Limited (ASX: ALL) witnessed a stock price surge of 4.1% to $29.04. While most of the sectors were in red zone, materials sector and utilities were up along with consumer discretionary sector. Another group, Washington H Soul Pattinson & Company Limited closed at $27.56, up 5.5 per cent.
Meanwhile and as per the minutes of the meeting of RBA (Reserve Bank of Australia) which was conducted on October 2, 2018, the present situation of the monetary policy would help the economy to witness growth and might also reduce the unemployment levels. Notably, the apex bank might not consider raising the rates in the short-term.