ASX 200 Futures Lower Amid US Market Gains and Economic Data

Overview:
ASX 200 futures are currently trading 29 points lower (-0.34%) as of 8:30 am AEDT, reflecting a weaker outlook for Australian stocks after a mixed performance in US markets overnight. Despite this, major US indices edged slightly higher in the final hour of trading.

Overnight Market Recap:

• US Benchmarks: Major US indices finished slightly higher, with the equal-weight S&P 500 lagging the official benchmark by nearly 4% in December, marking its worst relative performance since 1957. Historically, the equal-weight index tends to outperform in the months following such underperformance.
• US Dollar & Tariff Concerns: The US dollar strengthened 0.3%, nearing a two-year high, driven by fears that former President Trump could consider emergency measures for a new tariff program.
• Bond Yields & Stock Market Concerns: Rising bond yields have historically led to market pullbacks, and many investors are wary of a potential economic correction.
• Energy Sector: The US energy sector, previously the worst performer in 2024, surged into the top spot in early 2025, thanks to rising natural gas prices.
• Cryptocurrencies: Bitcoin fell below US$100,000 as rising bond yields dampened investor sentiment.

Stock Highlights:

• Quantum Computing: Shares of companies like Rigetti Computing, D-Wave Quantum, and IonQ plummeted 40-50% after Nvidia CEO Jensen Huang expressed skepticism about the immediate prospects of quantum computing, suggesting it could take decades to become practical.
• eBay: Shares surged 10% after Meta announced plans to test its listings on Facebook Marketplace.
• Getty Images: Stock plummeted 18% after the company revealed a US$3.7bn merger with Shutterstock, reversing the previous day’s 24% rally.
• Shell: Shares dropped after the company lowered its LNG production forecast for Q4, suggesting weaker-than-expected oil and gas trading results.

Central Banks:

• US Federal Reserve: At their December meeting, Federal Reserve officials expressed concerns that inflationary pressures might persist longer than expected, partly due to uncertainties surrounding Trump-era policies.

Economic Data:

• Australia Inflation: Australia’s headline inflation rose to 2.3% in November, slightly above the 2.2% consensus, driven by higher electricity prices. Core inflation fell to 3.2%, edging closer to the RBA’s 2-3% target.
• US Housing Market: The 30-year US mortgage rate remains near 7%, dampening home purchases.

What to Watch Today:

• Gold: Gold prices have hit a near-one-month high, despite challenges like a stronger US dollar and rising bond yields. One potential catalyst for this rally is the return of Chinese central bank gold purchases after a six-month hiatus.
• Copper: Copper prices surged 1.7% overnight and are up 6.0% over the last six sessions, driven by strong fund inflows and operational issues at Chile’s state-owned Codelco.
• Aussie Retail Sales: Retail sales data for November will be released at 10:30 am AEDT. The market expects a 1.0% month-on-month rise, following an unexpected 0.6% increase in October, largely driven by early holiday discounting.

ASX 200 Outlook:

• The ASX 200 is expected to ease today, breaking a five-day winning streak. However, cooler-than-expected inflation data has boosted market sentiment, and retail sales data later today could be a key catalyst for movement.
• Arcadium Lithium shares are poised to rise following news of regulatory clearance for its acquisition by Rio Tinto.