Markets Overview

  • ASX SPI 200 futures down 0.3% to 9,070.00
  • S&P 500 down 0.7% to 6,625.22
  • Dow Average down 0.7% to 45,930.79
  • Aussie down 0.4% to 0.6484 per US$
  • US 10-year yield fell 5.6bps to 3.9726%
  • Australia 3-year bond yield fell 9 bps to 3.38%
  • Australia 10-year bond yield fell 6.4 bps to 4.15%
  • Gold spot up 2.4% to $4,309.87
  • Brent futures down 1.4% to $61.07/bbl

Economic Events

  • 11:00: (AU) Australia to Sell A$800 Million 1% 2030 Bonds

Australian Treasurer Jim Chalmers says in Washington rare earths will be a part of his discussions with the National Economic Council’s Kevin Hassett.

Stocks slid, extending a weeklong stretch of volatility on Wall Street, as bad loans at two regional banks stirred concern about credit quality in the economy and further underscored the fragility of the $28 trillion bull market. Bitcoin tumbled, while bonds and gold rose.

Following an earlier advance driven by another solid outlook for artificial-intelligence demand, the S&P 500 turned lower as a pair of regional lenders disclosed problems with loans involving allegations of fraud, adding to concern that more cracks are emerging in borrowers’ creditworthiness.

Zions Bancorp sank 13% after it disclosed a $50 million charge-off for a loan underwritten by its wholly-owned subsidiary, California Bank & Trust, in San Diego. And Western Alliance Bancorp plunged 11% as it said it made loans to the same borrowers.

“As of now, those seem isolated to those two relatively sizeable regional banks,” said Steve Sosnick at Interactive Brokers. “Although they are similar in size and scope to Silicon Valley Bank, which caused a bit of a crisis about two-and-a-half years ago when it failed, there is nothing (at least so far) to indicate that these are anything systemic.”

The renewed bank volatility came at a time when the dramatic collapse of subprime auto lender Tricolor Holdings hit a giant like JPMorgan Chase & Co. in the third quarter, contributing a $170 million charge-off that led to the bank’s elevated credit-cost figure and sparking a warning from Jamie Dimon.

Those bank jitters roiled markets less than a week after the re-flaring of the trade war and amid all the uneasiness caused by the the dearth of economic data during the US government shutdown.

The S&P 500 fell 0.6%. A closely watched regional bank ETF sank over 6%. Oracle Corp. spiked after sharing its margin expectations for AI infrastructure projects. Over $3.4 trillion worth of options will expire Friday, according to Goldman Sachs Group Inc.

Benchmark 10-year yields dropped below 4% while those on two-year notes hit the lowest since 2022. Gold hit a fresh record.