Markets Overview

  • ASX SPI 200 futures up 0.1% to 8,824.00
  • S&P 500 down 1.2% to 6,769.56
  • Dow Average down 0.7% to 47,018.20
  • Aussie down 0.8% to 0.6485 per US$
  • US 10-year yield fell 2.3bps to 4.0871%
  • Australia 3-year bond yield rose 3.4 bps to 3.67%
  • Australia 10-year bond yield rose 1.3 bps to 4.35%
  • Gold spot down 1.6% to $3,938.12
  • Brent futures down 0.7% to $64.45/bbl

Economic Events

  • 09:00: (AU) Oct. S&P Global Australia PMI Compo, prior 52.6
  • 09:00: (AU) Oct. S&P Global Australia PMI Servi, prior 53.1
  • 11:00: (AU) Australia to Sell A$1.2 Billion 4.25% 2036 Bonds

Australia’s corporate regulator is set to continue its probe into the fast-growing A$200 billion private credit industry after uncovering inconsistent practices around reporting, margin and fee disclosures. RBNZ hosts a news conference following release of Financial Stability Report.

A chorus of Wall Street executives warning investors to brace for a pullback amid lofty valuations triggered a slide in stocks amid worries about whether the market has run ahead of itself. Bitcoin sank. Bonds rose.

With the rally confined to fewer and fewer shares as sentiment and technical indicators show signs of overheating, the chiefs of giants from Capital Group to Goldman Sachs Group Inc. and Morgan Stanley noted the possibility of a pullback as a healthy development.

“This reinforces our thinking that the stock market is ripe for some sort of material pullback over the near-term, no matter where it’s going over the intermediate/longer-term,” said Matt Maley at Miller Tabak.

Nobody needs to look hard to find warnings that stocks look frothy after a record-breaking surge from April’s nadir pushed valuations to levels associated with exuberance. Optimism has grown heated in recent months, with many traders seeming too busy chasing the upside to worry about an expensive market.

The S&P 500 recently notched one of its best six-month stretches since the 1950s fueled by the resilience of Corporate America, the booming outlook for artificial intelligence and hopes that the Federal Reserve will keep cutting rates to prop up the economy. Yet those solid gains combined with the recent narrowness of the advance spurred vulnerability worries.

There’s a clear example of that in Tuesday’s trading.

Palantir Technologies Inc. sank 9% even after boosting its outlook. Following a nearly 400% surge in the past year, its bullish AI prospects weren’t enough to offset valuation angst. Adding to the concerns, hedge fund manager Michael Burry disclosed bearish wagers on the firm and Nvidia Corp.

The S&P 500 fell over 1%. A gauge of tech megacaps lost 2%. Advanced Micro Devices Inc. will report earnings after the close.

The yield on 10-year Treasuries slid three basis points to 4.09%. Bitcoin sank 6%. The dollar hit the highest since May.