ASX to open lower; US earnings season looks solid, says BofA

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Australian shares are set to open down but US shares are rallying as analysts predict a solid earnings season ahead and investors punt on a pause in Fed interest rates rises.

Bitcoin -0.5% to $US30,280 near 1.03am AESTIn New York: BHP -2.1% Rio -2.4% Atlassian +2.7%Spot gold % to $US1,952.39 /oz at pm in New York10-year yield: US 3.83% Australia 3.98% Germany 2.48%Tesla gained 2.63% after the company said on Saturday it had built its first Cybertruck, after two years of delays. In contrast, Ford Motor tumbled 5.37%.

“Obviously, we are about to get all these reports but it feels to me earnings are going to be good and at the end of the day, how do you value stocks – based on the earnings and dividends,” said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco. “By and large, the market in its totality continues to be reasonably priced if not kind of cheap. My bigger concern going forward is the Fed is going to start doing things it doesn’t need to do to win the inflation battle but will ultimately now really start to hurt the economy.”Russia forced the collapse of a Ukraine grain-export deal nearly a year into the agreement, heightening uncertainty over global food supplies and escalating tensions in the region.

Bonds from Mexico’s state-owned oil giant were the biggest losers in Latin America on Monday after Fitch Ratings cut the company deeper into junk and kept a negative outlook on the debt. Edward Moya, senior market analyst, The Americas, OANDA: “Gold’s rebound will have to take a break until we know for sure if the Fed is done raising rates at the July 26th FOMC meeting. The labour market is still hanging in there, but expectations remain for it to gradually weaken.

 

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