Australian shares started the day slightly higher, as investors prepare for an outsized rate hike from the US Federal Reserve later this week, giving rise to global economic worries.
On Friday, the Dow Jones index fell 0.5 per cent, the S&P 500 lost 0.7 per cent and the Nasdaq Composite dropped 0.9 per centThe ASX 200 were up 8 points or 0.1 per cent to 6,747 at 10.17am AEST.Real estate and basic materials sectors opened higher.However, Qube Holdings dropped 3.8 per cent, Magellan lost 3.8 per cent and Block shed 3.6 per cent.
"Today [Friday] is a continuation of what we've seen this week, the volatility around the expectations for what the Federal Reserve may do, with 75 basis points baked in and 100 basis points a possibility," said Megan Horneman, chief investment officer at Verdence Capital Advisors. Paulsen said the FedEx warning had led investors to ask, "what if the Fed's going to tighten right into a recession?".
The yield curve inversion between the two-year and 10-year notes — seen as a recession harbinger — widened further before returning to Thursday's closing level. In equities, the Dow Jones Industrial Average fell 139 points, or 0.5 per cent, to 30,822; the S&P 500 lost 28 points, or 0.7 per cent, to 3,873; and the Nasdaq Composite dropped 104 points, or 0.9 per cent, to 11,448.
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