Company Interview / the open: ASX to drop amidst US concerns

The local market is set to retract yesterday’s gains and open lower, with ASX futures down 0.8%, following a negative lead on Wall Street due to investor concerns about a deteriorating US fiscal outlook. 

All three major Wall Street indexes closed with their biggest daily losses in a month as treasury yields spiked concerns that trillions of dollars will be added to the US government debt if the Congress passes President Trump’s proposed tax-cut bill. 

Meanwhile, Morgan Stanley has upgraded its call on US equities to, “overweight,” highlighting that, “Despite unprecedented policy uncertainty, the global economy is still in expansion mode, albeit with slowing growth.” 

On commodities, oil prices have eased after Oman’s foreign minister said a fresh round of nuclear talks between Iran and the US would take place later in the week. Brent futures fell down 0.7% to close at $65 a barrel, with copper rising 0.5% and iron ore having minimal change at $100 a ton. 

Currently, the Australian dollar is trading at US64.4c as the US dollar extended losses against major currencies. On the corporate front today, Karoon Energy (ASX: KAR) will be holding its annual general meeting, whilst Wesfarmers (ASX: WES) will be holding an investor briefing.