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Geopolitical tension weighs on Wall Street

Geopolitical tension weighs on Wall Street

By Tracey Warren (Sales Executive, CMC Markets Stockbroking)

Wall Street gave up gains and turned negative in the last hour of trade to close sharply lower as US Secretary of State John Kerry warned that the US would demand “accountability” after an “obscene” chemical weapons attack on civilian populations in Syria last week. After a subdued Monday trading session, markets ended firmly lower after trading in the black for most of the day.

The US Treasury last night announced it is likely to hit its debt ceiling in mid-October. Throw in Germany’s upcoming election, the mounting tensions in Syria and the lingering tapering debate, and it looks like a bumpy road for September and October.

The Australian market had a good run at the open yesterday before stalling at the high of 5,157 to trade lower into the afternoon. Reporting season continues with Macquarie Group’s credit rating reaffirmed by ratings agency Fitch, stating that Macquarie’s earnings were more volatile than other commercial banks. However, this was offset by the fact its funding liquidity was managed conservatively.

Gold has been on the rise benefiting from the flood of global liquidity and throwing in the recent geopolitical turmoil to the melting pot saw gold continue to edge higher overnight breaking above $1,400 an ounce for the first time since early June. Oil prices were mixed overnight with Brent slipping 0.1% to $106.28 a barrel, while Brent was up marginally at $111.13.

There are a plethora of earnings reports due out domestically today, with Billabong, Flight Centre, Seven Group and Whitehaven Coal some of the larger names.

© Scoop Media

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