ASX set for sluggish start after Wall Street rally loses momentum
Expectations are greatly increasing that the boom in AI investment will pay off by making the global economy more productive and stimulating further growth. Without productivity growth, inflation could rise even higher due to upward pressure from the mountains of debt built by the United States and other governments around the world.
In this case, optimists on Wall Street buy technology stocks, while pessimists buy gold, according to Thierry Wizman, a strategist from Macquarie Group.
Investors have traditionally viewed gold as a hedge against high inflation. Its price has risen more than 50 percent this year not only because of governments’ huge debt burdens, but also because of worldwide political instability and expectations of lower interest rates from the Fed.
Investors who want to “protect” themselves in the meantime can buy both technology stocks and gold, Wizman wrote in a research report.
Spot gold rose above $3,991 per ounce on Tuesday, reaching a new record, while December futures contracts in New York, the most active contract, exceeded $4,000 for the first time.
Elsewhere on Wall Street, Constellation Brands rose 1 percent after the beer and wine company said its results for the latest quarter were better than many analysts expected. But beer sales were still down from a year ago, with CEO Bill Newlands highlighting a “challenging socioeconomic environment that has dampened consumer demand.”
Intercontinental Exchange, the company behind the New York Stock Exchange, gained 1.8 percent after announcing it had agreed to invest up to $2 billion in Polymarket.
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Polymarket offers prediction markets that allow customers to profit by making predictions about events in politics, financial markets and popular culture, such as who the next mayor of New York City will be or whether the U.S. government will announce the existence of aliens this year.
Shares of Trilogy Metals in Toronto more than tripled after the White House announced late Monday that it had acquired a 10 per cent stake in the Canadian company, allowing its Ambler Road mining project in Alaska to move forward.
President Donald Trump late Monday ordered approval of a 340-mile road through the Alaskan wilderness that would allow the extraction of copper, cobalt, gold and other minerals used in the production of cars, electronics and other technologies. Trilogy is seeking to develop the Ambler facility in conjunction with Australia’s Southern 32.
In Europe, France’s CAC 40 index rose less than 0.1 percent on the day after falling due to recent political turmoil in Paris. France’s prime minister resigned suddenly on Monday.
In the bond market, the yield on the 10-year Treasury note fell to 4.12 percent from 4.18 percent late Monday.
AP, with staff writers
The Market Summary newsletter is a summary of the day’s transactions. Let’s each take ittoday afternoon.
