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Wall Street slipped on Wednesday as investors digested the first release of mega cap earnings results for Q3. The Nasdaq fell 0.56% a session after the tech heavy index posted a fresh record high, while the S&P500 and Dow jones lost 0.33% and 0.22% respectively.

Alphabet, Google’s parent company, kicked off the mega cap earnings results with a beat of analysts’ expectations driven by strong demand for the company’s cloud business. Meta and Microsoft will post results after the closing bell US time. Key US GDP data for Q3 was also released overnight indicating the U.S. economy grew at a slower pace than expected for the quarter. In Q3 the U.S. economy grew 2.8% on an annual basis while economists were expecting growth of 3.1%. Key payrolls data also out on Wednesday in the U.S. Though pointed to strength in the labour market with private job creations jumping to the highest level in a year.

Over in Europe on Wednesday, markets in the region closed lower following the release of key corporate earnings results and eurozone flash GDP data indicating that the eurozone economy grew 0.4% in Q3 which topped economists’ expectations of 0.2% expansion. The STOXX 600 fell 1.2%, Germany’s DAX fell 1.13%, the French CAC dropped 1.1%, and, in the UK, the FTSE100 ended the day down 0.73%.Across the Asia region on Wednesday, markets mostly fell led by Hong Kong’s Hang Seng sliding 1.65%, while China’s CSI index lost 0.9%, and Japan’s Nikkei ended the day down 0.96%.

Locally on Wednesday the ASX fell 0.83% despite inflation tumbling to an annual headline rate of 2.8% for the three months to September, down from the 3.8% reported in the June quarter. While this reding is positive for the rate outlook, the RBA is still unlikely to reduce the nation’s cash rate until at least 2025 as the drop in inflation is expected to be short lived with key drivers remaining sticky. Core inflation, which is the RBA’s preferred inflation reading, rose 0.8% in the September quarter which topped forecasts of 0.7%.

A key driver of the drop in inflation over the period was a decline in the petrol prices due to the 18% fall in the benchmark price of oil over the past year amid weakened demand outlook from China.

Rental prices have failed to ease up though which is another key driver of inflation remaining sticky, with a rise of 6.7% in the 12-months to September.

A tough warning from our supermarket giants saw shares in Coles and Woolworths decline 2.4% and 6.1% respectively yesterday. Woolworths warned it would post a lower profit in the first half after it was forced to implement more promotions to entice shoppers back into stores, which has been a theme felt across most retailers in FY25 so far.

What to watch today:

• Ahead of Thursday’s trading session the SPI futures are anticipating the ASX to open the day down 0.17% tracking Wall Street’s sell-off overnight.
• On the commodities front this morning oil is trading 2.77% higher at US$69.07/barrel, gold is up 0.44% at US$2787/ounce, and iron ore is down just 0.06% at US$104.09/tonne.
• The Aussie dollar is buying US$0.65, 100.79 Japanese Yen, 50.69 British Pence and NZ$1.10.

Trading Ideas:

• Bell Potter has maintained a buy rating on Gold Road Resources (ASX:GOR) and have raised the 12-month price target on the gold producer from $2.10 to $2.40 following the release of the company’s Q3 FY24 results which were weaker than expected but positions the company well for Q4 especially given the return to peak high-grade ore throughput in the strong gold price environment.
• And Trading Central has identified a bearish signal on Commonwealth Bank of Australia (ASX:CBA) following the formation of a pattern over a period of 36-days which is roughly the same amount of time the share price may fall from the close of $142.93 to the range of $129 – $132 according to standard principles of technical analysis.