Over in the US on Tuesday, Wall St closed mostly lower following the release of the most recent consumer confidence survey that came in much weaker than expected. The S&P500 fell 0.47% for its fourth consecutive losing session while the Nasdaq declined 1.35%, but the Dow Jones ended the session up 0.37%. Escalating trade tensions are also weighing on investor sentiment and contributing to market uncertainty as investors weigh up the impacts of Trump’s tariffs on Mexico and Canada which are set to be imposed next week.

In Europe overnight, markets closed mixed in the region as corporate earnings and defence spend in the region remain a key focus for investors. The STOXX 600 rose 0.15%, Germany’s DAX lost 0.13%, the French CAC fell 0.49%, and in the UK, the FTSE 100 ended the day up 0.11%.

Across the APAC region on Tuesday, markets closed lower as investors await the full impact of Trump’s tariffs on the region. Japan’s Nikkei lost 1%, South Korea’s Kospi Index lost 0.57% after South Korea’s central bank unexpectedly cut rates in a bid to stimulate the slowing economy, and Hong Kong’s Hang Seng lost 1.32%.

The local market reversed Monday’s gain to close 0.68% lower on Tuesday as a sharp sell-off in tech and discretionary stocks offset gains among utilities and staples stock. Investors have been very reactive to reporting season updates whilst also keeping an eye on valuations and movements out of the US, especially on the tariffs front.

We had a slew of corporate results out yesterday that sparked mixed reactions among investors with sharp rises and falls reported in key share prices. Domino’s Pizza shares tumbled over 10% after the leading global pizza maker swung to a loss in the first half amid $116m in one-off store closure related costs due to the company closing 205 loss-making stores.

Johns Lyng Group was the worst performer yesterday with shedding over a quarter of its value as the share price plummeted over 30% after the company downgraded group earnings guidance. The building and restoration services provider across Aus and the US faced a challenging operating environment especially in Australia with benign weather conditions reducing the volume of insurance claims, while the US had project commencement delays impacting performance.

And on the other hand, 2024 market darling Zip Co soared 14% yesterday on impressive 1H results including total transaction value up 23.9% to $6.2bn, lower bad debts, cash earnings more than doubling, increased growth in the US market and the company launched into the personal loans market in January.

What to watch today:

• Ahead of the midweek session on the ASX, the SPI futures are anticipating the ASX will open the day down 0.30% tracking Wall Street’s lower session overnight.
• On the commodities front this morning oil is trading 2.7% lower at US$68.83/barrel, gold is down 1.58% at US$2903/ounce and iron ore is up 0.06% at US$107.19/tonne.
• The Aussie dollar has weakened against the greenback to buy US$0.63, 94.39 Japanese Yen, 50.16 British Pence and 1 NZ$1.11 cents.

Trading Ideas:

• Bell Potter has slightly decreased the 12-month price target on Adairs (ASX:ADH) from $2.85 to $2.65 but maintain a buy rating on the leading furniture retailer following the release of the company’s first half results including revenue growth of 6.6% which was a good improvement from the last trading update however, the company’s Focus on Furniture brand continues to weigh on results.
• And Trading Central has identified a bearish signal on Praemium (ASX:PPS) following the formation of a pattern over a period of 23-days which is roughly the same amount of time the share price may fall from the close of $0.78 to the range of $0.73 to $0.75 according to standard principles of technical analysis.