That's it for today, and for the week: have a relaxing weekend everyone.
The Australian dollar could be one of the main currencies to feel the impact of the overnight US jobs data.
That's not just through the possible US dollar strength if the payrolls numbers come in higher than expected.
The Australian dollar could also weaken as it is used as a proxy for Asian currencies, Citi currency strategist Todd Elmer says:
- As the Fed moves towards taper and the market begins to start the countdown towards eventually tightening in policy, that leaves the [Australian dollar] particularly vulnerable.
- I think there are a lot of channels by which this has fairly far reaching effects that are negative for Aussie. It's likely to be associated with pressure on Asian currencies, which should see proxy selling of Aussie by the longer-term investors who use Aussie as a means to gain exposure to the region.
The Reserve Bank, which has been talking down the local currency, has been expecting that a reduction in the Fed's bond-buying program would weaken it, UBS interest rate strategist Andrew Lilley adds:
- The RBA thinks tapering is a question of when it happens in the next six months rather than if it happens in the next six months.
- I think they believe that the currency will come off when tapering happens, and they will be very disappointed if it did not.
In line with the market's soft close, Nine had a less than stellar debut, falling 3.4 per cent to $1.98, from its issue price of $2.05.
However, yesterday's debutante Veda added another 10 per cent in value to $1.925, after soaring 40 per cent on its first day.
The ASX lost 2.5 per cent for the week, making it the market's worst five days since early June.
The sharemarket has closed lower, extending yesterday's slump to trade at the lowest level since mid-October.
The S&P/ASX200 slipped 12.0 points, or 0.2 per cent, to 5186.0, while the broader All Ords lost 10.9 points, or 0.2 per cent, to 5186.0.
And no, that's not a typo, both the ASX200 and the All Ords closed at 5186.0. Can anyone remember when that last happened?
Among the sectors, financials dropped 0.4 per cent, while materials ended flat and energy gained 0.6 per cent.
There's a lot of focus on the number of new jobs created in the US last month (data is out later tonight), with many analysts suggesting that a number north of 200,000 could prompt the Federal Reserve to start winding back its stimulus as early as this month.
Judging by the fact the S&P 500 has closed lower for the past five days, there is increased expectations for a solid number in today’s US payrolls report, IG’s Chris Weston notes:
- The fact that we’ve also seen the VIX index (volatility index) up for eight straight days suggests a number of the equity bulls have preferred to protect portfolio holdings through the purchases of put options, rather than selling their underlying holdings.
- The print itself is usually a wild guess, as rarely does economic modelling accurately predict the actual number; and we’re likely to see reasonable revisions to the prior two months. But using the powers of probability from the usual lead-in indicators, a number between 170,000 to 180,000 seems about right.
- This will not be enough to cause a December taper, but will probably be the most friendly outcome for the equity market – not too hot, not too cold is the line the equity bulls want to run with.
- The tricky (albeit highly unlikely) scenario occurs if we see a number north of 240,000. In this case the US ten-year pushes to 3%, with the yield curve continuing to balloon, however it’s the front end of the curve that the Fed will hope doesn’t react too much.
Some more on Nine’s rather disappointing debut:
With Channel Nine we were very cautious and we still are, it's obviously an opportunistic float, says Investors Mutual founder and investment director Anton Tagliaferro:
- Most of the people bought into the debt at discounted levels and became shareholders.
- It's obviously a very cyclical sector, we're very cautious on the cycle, and in a sector that's facing structural headwinds because of the internet, pay TV, the future of free to air seems a little bit cloudy.
- We also didn't like the register. Those initial hedge funds ... are not the natural owners of the stock. The float is a very good exit mechanism for the hedge funds which bought the distressed debt.
Six new listings have hit the local market in the past five trading sessions - making it the biggest week of the year for IPOs - both in terms of the number of offers and the total value coming to market.
The afr has done the hard yakka and found out that about half of the 40 floats this year are trading below their listing price, with Indoor Skydiving Group, Fertoz and Freelancer the overall standout floats of the year.
Today it was Nine’s turn, but the biggest IPO of the year has had a disappointing debut, falling 2.9 per cent to $1.99.
That’s some ways from yesterday’s launch of Veda, which shot up more than 40 per cent and added another impressive 9.4 per cent to $1.915 today.
Best ... and worst by return to date.
Yields for 10-year Australian government bonds are at two-year highs ahead of the US jobs report out tonight, as markets wait to see if they should be pricing in a greater chance of a start to a reduction of the US Federal Reserve's asset-purchases program.
"That's the highest it's been since the Fed has been running QE3," says UBS interest rate strategist Andrew Lilley. "That's due to the expectation that QE is likely to be coming to an end. There's still some open debate about how far the Fed has driven the 10-year yield longer and how much the removal of the expectation of further accommodation would cause yields to rise.
"Anyone who is risk adverse is allocating out of long-end bonds at the moment, and that's what's been pushing yields higher and prices down."
Lilley says a few Fed members have flagged that a payrolls figure averaging around 200,000 a month would be sufficient for them to start their tapering plans. Following some revisions to the data, the averages are edging closer to the 200,000 figure.
"Most participants are still expecting that [the Fed] are more likely to [taper] next year, but they are starting to price in the probability [of a December taper]," Lilley adds.
"If we see a payrolls figure of 200,000 or more [overnight], that expectation will be furthered in the minds of traders."
Yield on 10-year Commonwealth bonds
China's three-month Shanghai Interbank Offered Rate has leapt sharply to 5.1670 per cent, the highest level the rate has been since China's central bank engineered a dramatic cash crunch in June.
However, short-term rates in the interbank market did not follow, with the benchmark seven-day bond repurchase contract remaining relatively flat, although elevated.
Hao Zhou, economist for ANZ Research in Shanghai, says the disconnect is due to speculation that the SHIBOR would be used as the base for negotiable certificates of deposit (NCDs).
The cash crunch in China began in late June and lasted through early July when the central bank refrained from injecting adequate cash to meet market demand. Rates remained elevated through mid-July as banks scrambled for funds.
Three-month Shibor, daily fixing.
Independent senator Nick Xenophon says now that Qantas’ credit rating is at junk status, its shareholders should ‘‘junk’’ its chief executive and board.
Ratings agency Standard and Poor’s has downgraded the airline’s credit rating, increasing the cost of financing and restricting access to investors that do not invest in lower-rated companies.
Trading in Qantas shares was temporarily halted pending the decision after the company announced it would cut 1000 jobs and flagged an underlying half-year loss of up to $300 million.
Senator Xenophon said shareholders should call an extraordinary general meeting to sack the board.
‘‘Alan Joyce would be to Qantas what Captain Francesco Schettino was to the Costa Concordia,’’ the South Australian senator told reporters in Canberra on Friday.
‘‘Because Qantas has now gone to junk status, one way of fixing the problem is to junk Alan Joyce and the board.
‘‘Enough is enough. The shareholders need to rise up ... because otherwise we will end up trashing a great airline.’’
The Qantas downgrade has been a long time coming, Jonathan Shapiro comments on afr.com:
After a lengthy battle, Qantas has finally succumbed to the dreaded downgrade to junk. S&P took bold and long-overdue action by cutting the airline’s credit rating to BB+ from BBB- on Friday. It’s the first time the airline has been rated junk after being assigned a BBB+ rating from S&P in 1993.
The reality is that Qantas had been given especially lenient treatment by the credit rating agencies and should have been downgraded many months ago.
By most of S&P’s own measures, Qantas was and has been a sub-investment grade rating for at least a year, yet maintained investment grade status. This week, we had an absurd situation where a company that the rating agencies said was in good health, was pleading for emergency support.
The large expected half year loss of up to $300 million revealed by Qantas left the agencies with little choice, and the situation reached a point where Qantas finance and business risk was so far out of kilter with their own methodologies that they simply had to act.
While the local market continues to trim its losses, regional sharemarkets are mixed:
- Japan (Nikkei): +0.2%
- Hong Kong: -0.2%
- Shanghai: -0.7%
- Taiwan: +0.3%
- Korea: +0.2%
- ASX200: -0.15%
- Singapore: -0.4%
- New Zealand: -0.4%
‘‘We’ve seen a very good string of economic data from the US in recent weeks and that suggests we’re getting closer to a Fed tapering,’’ says Mark Lister, head of private wealth research at Craigs Investment Partners. ‘‘Although the general consensus is for tapering to happen in 2014, the chance of a December tapering has gone up. That will drag equity markets weaker and push bond yields higher.’’
So what data will we get tonight from the US, and could it move the Australian dollar?
The key pieces of data will be the unemployment rate and the payrolls figures for November. Economists are expecting the payrolls data to show that 185,000 jobs were added to the economy for the month, and for the unemployment rate to have fallen from 7.3 to 7.2 per cent.
Unofficially though, market expectations have risen after a strong ADP jobs report on Thursday, with payroll forecasts closely to 200,000, NAB currency strategist Emma Lawson says.
If the data disappoints on the downward, such as by coming in around 160,000, the US dollar would fall, strengthening the Australian dollar.
But given that expectations have been boosted by the ADP figures, the data would have to surprise very strongly on the upside - about 220,000 for example - for there to be a significant rally in the US dollar, Lawson says.
The US data will be released at 12.30am AEST tomorrow.
Two once mighty Australian icons are looking for a present from Santa this Christmas, says Michael Pascoe:
When searching for a Santa Claus, it helps to be looking at the right time of year. December is peak season for most varieties of St Nicholas, but not for the government Santa being sought by those wounded Aussie icons, Holden and Qantas.
The best time to catch a government Santa is in the lead up to an election. That's when the taxpayers' money is most freely given away, when Santa Abbott and Chief Elf Hockey were handing out gifts ranging from $5 million for the Brisbane Broncos to $1.8 billion for the salary packaging industry and its clients. It didn't matter if the kiddies were naughty or nice, just that they had profile, real or concocted.
But there's no harm in continuing to ask out of season. Holden and Qantas are both hard at it, the former supported by a wide array of friends who get a share of whatever Holden manages to receive from Canberra, the latter with more than a hint of desperation, bordering on petulance. ("I want a new bicycle and I want it now or I'll, I'll, I'll cry! And it's all your fault that I need it!")
Australian shares have clawed back some of their early steep losses, but are still under selling pressure, as persistent speculation of an imminent reduction in US stimulus keeps investors nervously awaiting a crucial US jobs report later in the day.
The big banks have trimmed their early losses of more than 1 per cent:
- ANZ: -0.6% at $31.02
- CBA: flat at $75.48
- NAB: -0.6% at $33.45
- Westpac: flat at $31.50
The market took its lead from a weak session on Wall Street after stronger than expected US GDP data kept alive expectations that the Federal Reserve will start to slow its stimulus sooner rather than later.
"In typical post-GFC style, the US market sold off after better-than-expected market data signalled that the Fed might go back into 'taper-on' rhetoric. When will this world return to normal?" Rivkin CEO Scott Schuberg says in a note to clients.
It's official now: fuel shopper docket schemes offered by supermarket chains Coles and Woolworths will be hit with a discount cap of 4 cents per litre, the competition regulator just announced.
The Australian Competition and Consumer Commission forged a deal with Coles and Woolworths that will see an end to the cross-subsidiation between their supermarkets and petrol stations.
In the past supermarkets have offered discounts of up to 45 cents per litre off fuel prices.
"The ACCC has today accepted undertakings from each of Coles and Woolworths that they will each voluntarily cease making fuel saving offers which are wholly or partially funded by any part of their business other than their fuel retailing business, and will in addition limit fuel discounts which are linked to supermarket purchases to a maximum of 4 cents per litre," the ACCC said in a statement.
Qantas has reacted to S&P's downgrade of its credit status to BB+, or junk, warning the re-rating is "likely to be materially price sensitive’’.
The downgrade means Qantas could face the prospect of losing hundreds of millions of its $2.8 billion cash balance, as the transfer of revenue from credit card companies for transactions such as ticket sales is delayed because of the lower rating.
The airline could also face a $100 million-plus rise in its annual interest bill, higher leasing and hedging fees and the loss of some investors unable to invest in companies rated “junk”.
It has been a rough six years for Qantas investors, who have seen the company’s share price fall more than 80 per cent from $6.06 in 2007.
Flying low ... Qantas shares since their peaks in 2007.
Telstra’s venture capital arm has made an investment believed to be worth $10 million in US-based online storage service Box, in the latest move by the telecommunications carrier to expand its fast-growing cloud computing division.
The service, a competitor to the popular Dropbox service, sells online storage capacity to 20 million users, including consumers and 180,000 businesses.
Telstra was one of several country partners and investment firms that tipped $US100 million into Box for a combined 5 per cent equity stake, valuing the cloud service provider at $US2 billion, according to technology website TechCrunch.
Qantas shares immediately plunged when they came out of a trading halt a few minutes ago, falling as much as 4.7 per cent after the company's debt rating was slashed to junk status.
But the stocks quickly recovered some of the losses and are currently down 1.2 per cent at $1.0575.
The shares lost more than 11 per cent yesterday, after the airline shocked with a profit warning.
The competition regulator is poised to announce a deal this afternoon over the fuel shopper docket schemes offered by supermarket chains Coles and Woolworths that will see a price cap on discounts expected to be at 4 cents per litre.
The ACCC is set to announce momentarily that it has forged a deal with Coles and Woolworths that will see an end to the cross subsidiation of their supermarket stores over to their petrol stations.
The cap on shopper docket fuel offers is expected to be at 4 cents per litre. At its peak supermarkets were offering discounts of up to 45 cents per litre off fuel prices.
The dollar is struggling to hang onto overnight gains, trading at 90.45 US cents.
The currency shot up in the early hours this morning, to an offshore session high of 90.76 US cents, after ECB president Mario Draghi said the eurozone central bank had no plans to ease monetary policy.
While ECB rates were left on hold at a record low of 0.25 per cent, ANZ economist Andrew McManus says Draghi’s comments caused the euro to rise against the greenback, which helped the Australian dollar:
- When you had ... Draghi’s comments being less dovish than market expectations, you saw that rise in euro.
- General risk currencies just followed the euro a bit - we saw similar moves in the kiwi. That saw some more broad strength ... outside of US dollar.
The Australian dollar failed to make much ground against the euro and is trading near three-year lows at 66.27 euro cents.
Earlier, traders sold the greenback despite official data showing the US economy growing at an annual pace of 3.6 per cent during the third quarter, marking the fastest expansion in almost two years.
The ACCC has won claims of price fixing at Flight Centre, pulling shares down sharply.
The Federal Court in Brisbane on Friday found Flight Centre guilty of six charges of anti-competitive behaviour under the Trade Practices Act.
Flight Centre shares plunged nearly 8 per cent on the ruling news and are currently down 5 per cent at $45.11.
The sharemarket has clawed back some of its early losses but is still trading down after surprisingly good US economic growth in the third quarter raised expectations that the US Federal Reserve will hasten plans to taper its economic stimulus program.
‘‘It’s the overseas influence that’s impacting the market,’’ Lonsec senior client adviser Michael Heffernan says:
- Particularly in Europe which seems to be reacting more savagely to the prospect of tapering than what the US is.
- The good economic growth figures in the US are being interpreted as bad news.
- All the major blue chips that have had a great run are getting knocked back - coming back to reality after a great run.
Nine Entertainment opened slightly lower at $2.02 on its first day of trade, in a $1.9 billion float on the public market.
The shares quickly clawed back losses and are currently trading flat at $2.05.
The commercial free-to-air television, ticketing and digital business hoped to spur demand in the secondary market through pricing its shares at $2.05, which was the bottom of the $2.05 to $2.35 indicative range.
The book-build was believed to be covered just less than three times over.
Sources close to Nine said the float could have been conducted at $2.10 but the company wanted demand to exceed supply to help support the stock after the listing.
And more on the Qantas trading halt: as flagged earlier (10.21am) the airline's credit rating has been cut to junk status by S&P.
The ratings agency also hit Qantas with a negative outlook.
Some more details on QBE's trading halt: It is understood the insurance company could downgrade its profit.
The company has been facing problems in parts of its North American arm, which is one of the insurance giant’s biggest division.
“The trading halt is requested in order to allow QBE time to finalise its analysis of information and review by the Board, predominantly in relation to its North American Operations, and the impact on QBE’s forecast financial result for the year ending 31 December, 2013,” QBE said in a statement.
QBE has also confirmed that it will provide an update on Monday morning.
QBE has a December year-end and is to report its full-year numbers for the 2013 calendar year in February.
It's going to be a very mobile Christmas, with PayPal tipping shopping from mobile devices will increase by 60 per cent from last year's holiday season.
Overall shoipping is set to increase by 2.2 per cent from last year, with data from industry research group IBISWorld points to Australians this month spending $28.1 billion across a range of Christmas goods and services, from food and booze for parties and barbecues to toys, video games and clothing to place under the Christmas tree.
It expects the average Australian will spend $1,215 on Christmas with $1.5 billion to be spent on toys, games and video games, up 7.8 per cent for the year. Nearly $13 billion is tipped to be spent on food and eating out.
Shopping on the move: Christmas shopping numbers from mobile devices are set to soar. Photo: AFR
The big four banks are weighing on the ASX again today after yesterday's freefall, with all trading sharply lower this morning.
CBA: down 1.4% to $74.42
Westpac: down 1.4% to $31.055
ANZ: down 1.7% to $30.67
NAB: down 2.2% to $32.93
An earnings review is behind QBE’s trading halt - with the insurance company expected to downgrade its profit.
The company has been facing problems in parts of its North American arm, which is one of the insurance giant’s biggest division.
QBE has a December year-end and is to report its full-year numbers for the 2013 calendar year in February.
The shares will remain in a trading halt “until the earlier of the commencement of normal trading on Tuesday, 10 December 2013 or when the announcement is released to the market,” the company said in a statement on Friday.
It is understood the company will provide an update on the morning of December 9. QBE shares last traded at $15.45.
Here are the biggest winners and losers in the ASX200 this morning, (correct version this time, apologies for earlier error):
Today's top winners and losers
Bitcoin crashed (once again) overnight on news the People’s Bank of China is banning banks from trading in the digital currency.
The price (on Bitcoin exchange Mt Gox) plunged 30 per cent from $US1240 to $US870 - before yoyo-ing back to above $US1100 this morning.
The China damper came the same day as some Wall Street banks released initial coverage of the digital currency, showing they're treating bitcoin as something more than a passing fad.
"We believe bitcoin can become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money transfer providers," Business Insider quotes from a note by Bank of America currency strategist David Woo. "As a medium of exchange, bitcoin has clear potential for growth, in our view."
"Is bitcoin a bubble?" asks Woo. "Assuming bitcoin becomes (1) a major player in both e- commerce and money transfer and (2) a significant store of value with a reputation close to silver, our fair value analysis implies a maximum market capitalisation of bitcoin of $US15 billion (1BTC = 1300 USD). This suggests that the 100 fold increase in bitcoin prices this year is at risk of running ahead of its fundamentals."
Citibank also issued a note but its strategists are more sceptical, noting that bitcoin duplicates are easily made, which means that pricing the original bitcoin becomes difficult.
“My conjecture is that we will see big speculative swings as different ‘coins’ are created and move in and out of fashion and some emerging concern that there is nothing to anchor them and nothing to stop their proliferation,” Citi says.
The construction sector has continued to expand for the second-straight month, after three years of contraction.
The Australian Industry Group/Housing Industry Association Australian Performance of Construction Index (PCI) rose 0.8 points to 55.2 in November, on the back of an improvement in new orders and deliveries. It was the highest reading since November 2010.
All the major sub-sectors grew for the month, although house building and apartments lost some ground, AiG said. Housing building lifted to 62 points, apartments to 57.9 points, commercial construction by 52.9 points and engineering construction by 52.5 points.
"The fact that growth was reported in each of the four sub-sectors is particularly encouraging and adds to the signs that the long-awaited re-balancing of the domestic economy may be getting underway on the back of low interest rates and a lift in business and household confidence," AiG's director for public policy Peter Burn said.
"However, given the extent of the slump in residential and commercial construction over more than three years, the expansions recorded in October and November are from a low base and we are still some months from a convincing recovery," Dr Burn said.
Some more on Qantas: analysts have been busy cutting their recommendations and price targets after yesterday's shock profit downgrade, amid expectations the airline will sell terminal leases to protect its credit rating.
CIMB cut its 12-month target to $1.14 from $1.30, cautioning it did not expect a material turnaround in the second half of fiscal 2014.
"We forecast losses to continue into fiscal 2015 as excess capacity continues to put pressure on yields in both the domestic and international markets," analyst Mark Williams says in a research note.
A sale of Qantas terminal leases would make "the most sense" to boost Qantas' balance sheet because it could raise up to $1 billion and keep the airline's broader business intact, Williams says. "A partial sale of the Loyalty [frequent flyer] business would likely attract a lot of interest, but we think would be a last resort given it is one of the jewels in the crown."
Goldman Sachs cut its price target to $1.16 from $1.37, noting that with operating conditions remaining "very challenging," the key question was whether rival Virgin Australia would resume aggressive growth following its recent capital raising, and whether Qantas could sell assets to protect its credit rating.
Deutsche Bank cuts its target to $1.15 from $1.40, noting that expected losses of up to $611 million in fiscal 2014 meant the airline would require a yield increase of 4 percent to bring it back into profitability.
"Under the current competitive landscape we do not think that this is realistic," analyst Cameron McDonald says.
UBS overnight downgraded its recommendation on Qantas from 'buy' to hold'.
Qantas shares have also been put into a trading halt, after yesterday's shock profit warning put the shares into an 11 per cent tailspin.
Talk is S&P is about to downgrade the airline's credit rating to junk status, after Moody's put it on review for a possible downgrade to its investment grade rating because of its deteiorating financial situation.
QBE’s shares have been placed in a trading halt pending an announcement.
The shares will remain in a trading halt “until the earlier of the commencement of normal trading on Tuesday, 10 December 2013 or when the announcement is released to the market,” the company said.
The stock market has opened flat, following a fifth day of losses on Wall Street overnight as investors brace for a possible cut to US central bank stimulus as early as this month.
The S&P/ASX200 index is at 5196.3, while the All Ords is at 5195.3, both nearly unchanged to yesterday's close.
Financials are extending yesterday's slide, with losses in the banks offset by gains in miners.
The Australian dollar has remained stable about 90.65 US cents after the latest data on the construction sector showed that it had expanded for the second-straight month, after three years of contraction.
The local currency was trading about 90.30 US cents late yesterday, but rose almost half a cent to trade around 90.68 US cents this morning, shrugging off the stronger than expected GDP data out of the US overnight.
However, yields on 10-year Australian government bonds lifted overnight, in line with a rise in 10-year US Treasuries, to 4.43 per cent - levels not seen since November 2011.
Yields on 10-year US Treasuries returned to September highs, trading at 2.87 per cent ahead of a much-anticipated official US jobs report.
Currency strategists are now focusing on the US payrolls data out tonight, saying a higher-than-expected growth in jobs added to the US economy could see the Australian dollar under further downward pressure.
Channel Nine will make its stock market debut at midday today, and while it is expected to have a strong opening day, analysts say there are longer term doubts about the company's earnings.
"The IPO price at $2.05 does give it a bit of room to move on the upside," IG market strategist Evan Lucas said.
"I think tomorrow they will probably get away nicely... it should be an okay float," he said.
He said questions remained about Nine as a long term investment due to the uncertain outlook for free to air television.
"There is always going to be a question regarding the advertiser revenue it is generating but its digital assets do look reasonable," he said.
Australian car maker Holden may already have decided to leave the country regardless of what action or additional assistance Canberra offers up.
With senior Liberals already agitating for a re-think of car industry assistance and convinced that the billions thrown at the sector over decades is a waste of money, there are now reports that a decision on the car maker's future has already been made in Detroit, headquarters of General Motors, Holden's parent company.
The troubled manufacturer, beset by high labour costs and a high Australian dollar, has asked for a decision on additional assistance from Canberra before Christmas.
A spokeswoman for Industry Minister Ian Macfarlane was quick to deny the reports of Holden's exit.
''They haven't made a decision about their future in Australia,'' spokeswoman Kylie Barron said. ''There is no change.''
Now according to reports out of Canberra on Thursday, senior ministers in the Abbott Government are convinced that Holden is on the way out as early as 2016.
That would leave Toyota as the only local manufacturer and almost certainly hasten its demise here as well.
US stocks declined again overnight after a surprisingly good report on US economic growth in the raised expectations the Federal Reserve will hasten a plan to scale back aggressive monetary stimulus.
The Dow Jones Industrial Average lost 68.65 (0.43 per cent) at 15,821.12, the broad-based S&P 500 fell 7.74 (0.43 per cent) to 1,785.07, while the tech-rich Nasdaq Composite Index dipped 4.84 (0.12 per cent) to 4,033.16. The Dow and S&P 500 have now declined the last five days.
Jack Ablin, chief investment officer at BMO Private Bank, said the losses were unusual for December, which is usually a good month for the stock market.
"The market is taking good (economic) news as bad news," Ablin said. "Investors are fearful of Fed policy and are shifting their beliefs on the timing of tapering."
Thursday's declines came after the Commerce Department reported the US economy grew at speedy 3.6 per cent in the third quarter, far above the 3.0 per cent many analysts had expected.
Ablin said the GDP data was the latest US economic report to best expectations, raising speculation that Friday's jobs report will also surprise to the upside and thereby boost taper talk even more.
What you need2know this Friday:
- SPI futures down 22 points to 5,189.
- AUD fetching 90.65 US cents, 92.23 yen, 66.34 euro cents, 55.51 pence
- On Wall St, S&P500 -0.2%, Dow Jones -0.2%, Nasdaq flat
- In Europe, Eurostoxx -1.4%, FTSE100 -0.2%, CAC -1.2%, DAX -0.6%
- Spot gold slips 0.9% to $US1233.06 an ounce
- Brent oil falls 0.7% to $US111.12 per barrel
- Iron ore drops 0.1% to $US139.50 per tonne