Live Updates: AUD Tumbles Below 70 US Cents, Wall Street Plunges Amid AI Stock Sell-Off
The Australian dollar (AUD) has taken a hit, dropping 0.4% overnight and currently trading at 69.95 US cents. This comes as the Reserve Bank of Australia (RBA) continues to signal further interest rate hikes, with futures markets pricing in another 1.5% increase by the end of the year. Meanwhile, Wall Street witnessed a tech stock sell-off, with the tech-heavy Nasdaq index plunging 1.2%.
Market Snapshot
- ASX 200 Futures: +0.2%
- AUD: 69.95 US cents (-0.4%)
- Wall Street: Dow Jones (+0.7%), S&P 500 (-0.2%), Nasdaq (-1.2%)
- Europe: FTSE (+0.8%)
- Spot Gold: +0.3% to $4,949/ounce
- Spot Silver: +3.1% to $85.84/ounce
- Oil (Brent Crude): +1.8% to $64.36/barrel
- Bitcoin: -3.3% to $73,499
Commentary on Negative Gearing and Capital Gains Tax
The article also touches on a potential policy change that could impact investors. The Australian Council of Trade Unions (ACTU) is pushing for changes to capital gains tax (CGT) discounts, suggesting a reduction from 50% to 25% and limiting negative gearing concessions to one investment property with a phase-in period. This proposal aims to curb property speculation and encourage investment in new housing and productive businesses.
Wall Street's AI Bubble Concerns
The tech sector's recent performance has raised concerns about an AI bubble. Wall Street's tech index dropped 1.2%, with notable losses in Advanced Micro Devices, Palantir, and other tech companies. The focus is on whether AI investments have become too large, with Alphabet (Google's parent company) falling 2.3% ahead of its quarterly results, which will reveal the impact of AI on its sales growth.
Obesity Drug Manufacturer's Success Story
In contrast, the obesity drug market is experiencing a boom. Eli Lilly, a major weight loss drug manufacturer, forecasts a 25% revenue rise in 2026, while its rival, Novo, expects sales to fall between 5% and 13%. Lilly's success has boosted its market value to over $1 trillion, making it the first pharmaceutical company to reach this milestone, while Novo's shares have declined 40% in the past year.
Australian Steel Industry Struggles with Imports
Australian steel businesses are facing challenges due to cheap imports, leading to unprofitability. One company's boss expresses concern, stating that they are hanging on by a thread, hoping for an improvement in the market. If not, drastic decisions may be necessary.
Labor's Housing Tax Policy Considerations
Labor is considering changes to housing tax policies, including capital gains tax. A government source confirms ongoing discussions, with a potential focus on reducing CGT discounts and limiting negative gearing. This comes after Labor's controversial housing tax agenda during the 2019 federal election under Bill Shorten.
Rate Hike Speculation
The RBA's rate hike on Tuesday has sparked discussions about further hikes. NAB's chief economist, Sally Auld, suggests a small chance of another rate hike in March, depending on upcoming data, including GDP and inflation figures. The market is pricing in another 1.5% increase by the end of the year, with May being a key focus.
