Last night's US trading sessions saw multiple markets move lower simultaneously, presenting a red flag for the ASX this morning.
The volatile session saw multiple markets move lower overnight, triggering concerns that a wider selloff might be on our doorstep.
US markets
The S&P 500 Index (SP: .INX) lost as much as 2.8% in intraday trade, before recovering a little toward the end of the session. The overall loss after the late recovery sits at 1.29%, down around 40 points. This is a little less of a blow than the start of the session, however still low enough to cause concern with US investors.
Commodities
Commodity markets were also caught in the storm, particularly gold and silver.
The price of gold fell as much as 3.5% in intraday trade, however, like the US stock market, pulled back toward the end. The net loss at the end of the session was 2.05%. However, this is still a significant move for the precious metal, meaning that its price went from US$1,950 down to US$1,911 per ounce in a single session. At one point, the price reached as low as US$1,882 per ounce.
Silver fared far worse that its higher priced cousin, falling as much as 11.5% during trade. This is a significant blow to the silver price, which is now trading at only US$25 per ounce. Silver investors have enjoyed rapid growth in the price recently, as the precious metal reached highs of almost US$30 per ounce only a few short weeks ago.
Cryptocurrency
The price of bitcoin plummeted during last night's activity. As the digital currency often moves in correlation with the gold and silver markets, this was not a surprise. However, it was still a blow to investors, with the price falling as much as 5.8% during the session. This leaves the price of bitcoin this morning at US$10,450, down from almost US $11,000 the previous day.
More broadly, the entire cryptocurrency market saw wide selloffs, losing close to a staggering US$20 billion overnight. It's a big blow for the market which only recently had begun to recover from the falls on 3 September. Early in the month, a huge selloff saw the market lose a massive US$60 billion over 2 days.
Australian market – ASX
Locally, we are expecting a drop in the market this morning, following the volatile session last night.
While the S&P/ASX 200 Index (ASX: XJO) closed at 5,822 points yesterday in Monday's trade, futures indicate a lower open today. Contracts such as the Australian 200 AUD contract (OANDA: AU200AUD) fell as much as 60 points overnight. Currently, futures are pointing at the 5,780 point mark as the market opens today, meaning a down gap of around 40 points could present.
Foolish takeaway
It's a rocky start to the week after a small loss yesterday on the ASX. Right now, it's watch and wait for most Australian investors. Today will show whether we will see further declines or whether the market will see some short term stability in an attempt to find it's feet.
