Weak forecasts for US retailers come ahead of the crucial holiday shopping period. (Reuters: Shannon Stapleton)
On Wall Street, the Dow Jones has retreated from early gains after some weak forecasts from heavyweight retailers. Australian share market futures are also pointing lower.
Market snapshot at 7:10am (AEDT):
- ASX SPI futures -0.6pc at 6,781, ASX 200 (Tuesday’s close) +0.7pc at 6,814
- AUD: 68.25 US cents, 52.85 British pence, 61.61 Euro cents, 74.09 Japanese yen, $NZ1.06
- US: Dow Jones -0.3pc at 27,935, S&P 500 flat at 3,122, Nasdaq +0.3pc at 8,580
- Europe: FTSE 100 +0.2pc at 7,323, DAX +0.1pc at 13,221, CAC -0.3pc at 5,909, Euro Stoxx 50 -0.2pc at 3,333
- Commodities: Brent crude -2.5pc at $US60.84/barrel, spot gold +0.1pc at $US1,472.45/ounce
US markets are mixed in late trade, with the Dow weighed down by a fall in Home Depot shares (-5.3 per cent), after the home improvement retailer cut its sales forecast for the second time this year.
Shares in department store chain Kohl’s took a bigger hit (-19 per cent) as it downgraded its profit outlook and said promotional discounts will hurt its earnings.
The downbeat forecasts come ahead of the US holiday shopping season, which begins with the post-Thanksgiving sales next week.
“At the moment the consumer sentiment is still strong but that doesn’t mean it is going to reflect in every retailer’s earnings,” Randy Frederick from Charles Schwab told Reuters.
Shares in other US retailers also fell, including Macy’s and Nordstrom.
Meantime, uncertainty over the US-China trade talks continued, as Donald Trump threatened to impose even higher tariffs on Chinese goods if a deal could not be reached.
Oil prices fell sharply overnight, weighed down by the trade uncertainty and concerns about an excess of global crude supply.
The Australian dollar has regained ground, after falling yesterday due to the Reserve Bank’s meeting minutes indicating the central bank seriously considered cutting interest rates earlier this month.
“Given that the [RBA] came close to easing again in November, and recent labour market and retail data have been weaker than expected, it seems fair to conclude that the hurdle to further easing isn’t high,” said JP Morgan chief economist Sally Auld.