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Over in the US on Tuesday, all eyes are on the Fed as the final FOMC meeting for 2024 kicks off today with the expectation that the US central bank will announce a second cut to the nation’s cash rate to end 2024 with a cash rate of 4.25% to 4.5%. The Dow Jones broke a record overnight after posting its 9th straight losing day, the longest streak since 1978, while the S&P500 lost 0.4% and the Nasdaq ended the day down 0.32%.

Across Europe overnight, markets closed mostly lower as investors await key central bank decisions out later in the week. The STOXX 600 fell 0.41%, Germany’s DAX lost 0.33%, the French CAC rose 0.12%, and, in the UK, the FTSE100 ended the day down 0.81%. The Bank of England meets on Thursday this week with markets pricing in only a slight chance of a final rate cut for the year.

And across the Asia region on Tuesday, markets closed lower with Japan’s Nikkei falling 0.24%, while South Korea’s Kospi Index lost 1.29%, and Hong Kong’s Hang Seng ended the day down almost half a percent.

The local market overturned the recent red run to close higher on Tuesday as a rebound in healthcare stocks and the big banks boosted the key index to a 0.78% gain at the market close. Industrials stocks led the gains on Tuesday followed by the two growth sectors of tech and real estate, while materials and energy stocks came under pressure following the release of weak economic data out of China on Monday.

ANZ Roy-Morgan consumer confidence data also out yesterday impacted investor sentiment as consumer confidence dropped 1.6 points to 83.9 points in mid-December following a strong period of spending in the Black Friday sales period for Aussie consumers.

Battery metals and tech company Novonix rallied 5.5% yesterday after the company announced it has received a conditional loan worth US$755m from the US department of energy to proceed with the construction of a manufacturing plant in Tennessee for the production of synthetic graphite, a key ingredient of lithium-ion batteries.

Star Entertainment Group’s challenges escalated yesterday after Kate Williams, who was appointed deputy company secretary in July this year, became the latest of a number of the leadership team to stand down amid a very challenging time for the casino operator over the last 12-months. Just days ago, Mark Mackay resigned as Chief Executive Officer of the Star’s Gold Coast operations effective immediately, after just over 3 months in the role. Shares in Star are down 63% YTD. The casino operator did however also announce today the appointment of a new group CFO, Mr Frank Krile who, if approved through required processes, brings extensive experience from his time at Lendlease.

Data 3 shares tumbled 9.84% after the company announced changes to the incentives it receives for the provision of Microsoft services effective from January 1, 2025. The reduction in incentives earned by Data 3 from its provision of Microsoft services is expected to impact FY24 gross profit by 3% but is not expected to have a material impact on future earnings according to the release by Data 3 yesterday.

What to watch today:

• Ahead of the midweek trading session here in Australia the SPI futures are anticipating the ASX will open Wednesday’s session down 0.17% taking lead from Wall Street’s slide overnight.
• On the commodities front this morning, oil is trading 1.18% lower at US$69.87/barrel, gold is down 0.25% at US$2644/ounce, and iron ore is up 0.1% at US$105.41/tonne.
• The Aussie dollar has further weakened against the greenback overnight to buy US$0.63, 97.23 Japanese Yen, 50 British Pence and NZ$1.10.

Trading Ideas:

• Bell Potter has maintained a sell rating on Fortescue (ASX:FMG) but have raised the 12-month price target on the mining giant following some recent share price appreciation. The analyst sees slight EPS growth in 2025 based on slightly higher iron ore price forecasts but lower production and higher input costs create challenges for FMG heading into next year. The new price target is $17.17.
• And Trading Central has identified a bullish signal on Beacon Lighting (ASX:BLX) following the formation of a pattern over a period of 33-days which is roughly the same amount of time the share price may rise from the close of $3.15 to the range of $3.60 to $3.70 according to standard principles of technical analysis.