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Wall street closed mixed on Tuesday after Fed Chair Jerome Powell said interest rates may need to stay higher for longer if inflation drivers and prices remain sticky. The Dow Jones rose 0.17%, boosted by UnitedHealth shares on the back of better-than-expected first quarter revenue. The S&P500 fell 0.21% on Tuesday and the tech-heavy Nasdaq ended the day down 0.12%.

Powell remarked that recent data shows solid economic growth and continued strength in the labour market, but lack of further progress so far this year on returning to the Fed’s target 2% inflation rate goal is holding back rate cut outlook.

In Europe overnight, markets closed lower as investors assessed developments in the Middle East tensions. The STOXX600 fell 1.6%, weighed down by mining and banking stocks. Germany’s DAX ended Tuesday’s session down 1.44%, the French CAC lost 1.4% and, in the UK, the FTSE100 declined 1.82%.

Across Asia markets overnight, markets closed lower as investors assessed economic data and await Israel’s response to Iran’s attack over the weekend. South Korea’s Kospi index fell 2.28% on Tuesday, Japan’s Nikkei lost 1.94%, and Hong Kong’s Hang Seng lost 2.12%.

Over in China, the CSI index fell 1.07% on Tuesday following the release of key economic data released painting a very mixed picture into the recovery progress for the world’s second largest economy. GDP Growth rate came in above expectations at 5.3% for Q1 on an annual basis, where economists were expecting a 5% rise, indicating economic growth is underway. Conversely though, industrial production came in at a 4.5% rise for March on an annual basis which is a decline from the 7% rise recorded in February and well below economists’ expectations of a 5.4% rise, indicating industrial output continues to struggle post-pandemic. Retail Sales data also out in China yesterday came in at a rise of 3.1%, which similar to industrial production, is a 2.4% decline on February and was well below economists’ expectations, indicating Chinese retail consumption is sliding. This key data paints a very sluggish recovery picture out of the world’s second largest economy.

The local market had its worst trading session in over a year as the ASX closed Tuesday’s session down 1.81%, tracking Wall Street’s turbulence on Monday following the releasee of stronger-than-expected retail sales out in the US which further dents hopes of rate cuts in the near-term for the world’s largest economy. Escalating tensions in the Middle East also crippled investor sentiment toward riskier high growth assets like tech and real estate stocks, however, all 11 sectors closed in the red on Tuesday.

Supermarket giants came under pressure yesterday as the Senate hearing about supermarket pricing saw Woolworths CEO Brad Banducci threatened with a six-month prison sentence and a fine for contempt of court.

Gold miners rallied yesterday as the price of the precious commodity climbed closer to the record set in recent weeks on rising geopolitical concerns, with Ramelius Resources adding 0.77%, while explorer Spartan Resources jumped 8.7% after announcing a new high-grade discovery at the Pepper prospect just south of its Never Never gold deposit.

What to watch today:

• Ahead of the midweek trading session here in Australia the SPI futures are anticipating the ASX to open the day down 0.3% on the back of the global sea of red overnight.
• On the commodities front this morning, oil has retreated to trade 0.16% lower at US$85.26/barrel, coal is up 2.06% at US$136.50/tonne, gold is up 0.06% at US$2392/ounce and iron ore is flat at US$106.05/tonne.
• AU$1.00 is buying US$0.64, 99.19 Japanese Yen, 52.29 British Pence, and NZ$1.09.

Trading Ideas:

• Bell Potter has downgraded the rating on Cooper Energy (ASX:COE) from a buy to a hold and have increased the 12-month price target on the gas exploration and development company following the release of the company’s Q3FY24 trading update including quarterly gas production of 5.5Petajoules, sales of 5.6Petajoules and revenue of $51.8m which were all in-line with Bell Potter’s expectations. The downgrade to a hold for Cooper Energy follows recent share price appreciation and ahead of the company’s expected achievement of free cash flow generation in FY25.
• And Trading Central has identified a bearish signal on Challenger (ASX:CGF) following the formation of a pattern over a period of 46-days which is roughly the same amount of time the share price may fall from the close of $6.50 to the range of $5.80 to $5.90 according to standard principles of technical analysis.