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Investors face a third day of share-market pressure after growth worries weighed on Wall Street and mining heavyweight BHP announced its biggest shake-up in 20 years.

The Dow and S&P 500 fell for the first time in six sessions. Iron ore, copper, gold and oil declined. The dollar slid to its lowest in nine months.

ASX futures retreated 34 points or 0.46 per cent. The S&P/ASX 200 lost 71.5 points or 0.94 per cent yesterday. The index has not recorded three straight losses since mid-May.   

Wall Street

The Dow and S&P 500 broke a five-session winning run as a decline in retail sales underlined the economic threat from the spread of the delta Covid variant.

The Dow Jones Industrial Average shed 282 points or 0.79 per cent. The S&P 500 gave up 32 points or 0.71 per cent. The Nasdaq Composite led the retreat with a fall of 138 points or 0.93 per cent.

“The retail sales drop I think clarified for investors that COVID may well be a big problem going into the fall,” Rick Meckler, partner at Cherry Lane Investments, told Reuters.

Retail sales contracted 1.1 per cent last month, more than the 0.3 per cent expected by economists polled by Dow Jones. Much of the decline came from cars, clothes, books, musical instruments and sports goods. Online sales declined 3.1 per cent, suggesting at least some of the drop was due to the sugar hit from government stimulus cheques fading.

Concerns about the waning appetite of the consumer were further sharpened by an earnings miss from Home Depot. Shares in the home improvement chain fell 4.27 per cent after  same-store sales were weaker than expected last quarter.

Big Tech declined following news of the decline in online sales last month. Amazon dropped 1.73 per cent, eBay 3.2 per cent and Apple 0.62 per cent.

The healthcare sector hit a record as investors favoured traditional defensive sectors. Pfizer gained 3.09 per cent, Moderna 7.49 per cent and Johnson & Johnson 0.92 per cent.

Australian outlook

Another challenging session coming up as investors react to US losses and massive changes at BHP. The S&P/ASX 200 has fallen sharply this week and faces a third straight loss for the first time since mid-May. The index has given up 118 points or 1.5 per cent in two sessions.

BHP, largest of the mining heavyweights, is today’s wildcard following a string of major announcements last night. The Big Australian plans to exit the oil business, launch into potash and end its dual-listed corporate structure. The announcements overshadowed a huge full-year underlying profit of US$17 billion and caused major dislocations in its overseas listings. BHP’s UK listing jumped 3.4 per cent, but its US listing tanked 7.9 per cent.

Under the proposed restructure, the UK half of the dual-listed company will effectively be acquired by the Australian half to “re-home” in Australia. The company will retain secondary listings in the US, UK and South Africa.

The miner declared a record dividend of US$2 per share. CEO Mike Henry said the company will invest US$5.7 billion in a potash project in Canada.

Woodside Petroleum will also be on investors’ radar today after striking a deal to merge with BHP’s oil assets to create one of the largest oil and gas companies in the world. The company reports today.

The scale of the changes at BHP threatens to overshadow another huge day of corporate earnings. Today’s menu looks like this: CSL, Coles, Santos, Vicinity Centres, Tabcorp, OZ Minerals, Super Retail Group, Corporate Travel Management, Domino’s Pizza, Accent Group, Nearmap, Netwealth, Pro Medicus, Emeco, Tassal Group, Aventus and Southern Cross Media, Mount Gibson Iron, Bapcor, Deterra and A2 Milk (sources: CommSec, Bell Potter).

The dollar dived to a nine-month low overnight after US retail sales encouraged a “flight to safety”. The US dollar index climbed more than 0.5 per cent. The Aussie fell 1.16 per cent to 72.54 US cents.

Consumer stocks led the selling in the US: the discretionary sector slumped 2.31 per cent. Cyclicals were also weak. Materials fell 1.21 per cent, industrials 1.06 per cent and energy 0.92 per cent.

Defensive sectors fared best. Healthcare rose 1.12 per cent, real estate 0.14 per cent and consumer staples 0.04 per cent.

Commodities

Iron ore dropped below US$160 a tonne on news Chinese steel output wilted last month to a 15-month low. Production declined 7.6 per cent from June as China clamped down on emissions ahead of the Winter Olympics. The spot price for ore landed in China dropped US$3 or 1.8 per cent to US$159.50 a tonne.

Oil fell for a fourth session amid growing doubts about global growth following soft data this week from China and the US. Brent crude settled 48 US cents or 0.7 per cent lower at US$69.03 a barrel.

Gold retreated for the first time in three sessions as the greenback rallied. Metal for December delivery settled US$2 or 0.1 per cent lower at US$1,787.80 an ounce. The NYSE Arca Gold Bugs Index dropped 0.89 per cent.

Copper erased early gains as the dollar rally gathered strength (a stronger US dollar makes dollar-denominated commodities more expensive for holders of other currencies). US-traded copper fell 2.8 per cent on Comex to US$4.21 a pound.

On the London Metal Exchange, benchmark copper fell 2 per cent to US$9,226.75 a tonne. Aluminium dipped 0.2 per cent, nickel 1.6 per cent and zinc 0.6 per cent. Lead gained 0.6 per cent and tin 0.1 per cent.

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