The Australian sharemarket is set for a flat open this morning with the SPI Futures down 5 points or 0.07% at 6471 at 7:00 AEDT Monday morning.

Stocks in the US slipped Friday, capping a down week and month and closing the books on a losing quarter as investors grappled with more evidence of stubbornly high inflation.

They closed the books on a quarter that has seen almost nothing but declines with another down day on Friday. The S&P 500 dropped 54.85 points, or 1.5 percent, to 3,585.62. The Dow Jones Industrial Average fell 500.10 points, or 1.7%, to 28725.51. The Nasdaq Composite fell 161.89 points, or 1.5%, to 10575.62.

All three indexes closed at their lowest levels so far in 2020. The Dow Jones Industrial Average has fallen 21% in 2022, the S&P 500 has lost 25% and the tech-heavy Nasdaq Composite has declined 32%.

Oil: Brent crude, the global oil benchmark, was down 0.6% Friday to $87.96 per barrel. Brent posted a 23% quarterly loss but is up 13% this year. Gold is flat at US$1,660.61.

Aussie yields On the local bond front, Aussie 2 years was at 3.28% and Aussie 10 years at 3.88%. In the overseas market, the yield on the 2 Year US Treasury notes was higher at 4.287% and yield on the 10 Year US Treasury notes upticked to 3.83%.

The Australian dollar fell to 63.99 US cents. The Wall Street Journal Dollar Index, which measures the U.S. currency against 16 others, rose slightly to 103.95.

Asia

Most stock markets in the Asia-Pacific region fell. Australia, Japan, South Korea and mainland China’s benchmark indexes fell between 0.6 percent and 1.8 percent, while Hong Kong’s Hang Seng Index gained 0.3 percent.

China shares finished the session lower, adding to the general sell-off that has characterized the past few weeks as higher interest rates have knocked global equities. The Shanghai Composite Index fell 0.6% to 3024.39, and the Shenzhen Composite Index lost 1.3%, to 1912.00. The tech-heavy ChiNext Price Index was the biggest loser, finishing down 1.9% at 2288.97. Losses were tilted toward newer-energy sectors, which tend to be riskier growth areas that are particularly sensitive in a high-rate environment. EGing Photovoltaic lost 6.8% and Zhejiang Narada Power Source slid 7.3%.

Hong Kong's Hang Seng rose. "Asides from the recession and geopolitical fears, China's central bank looks set to take a stand to support its currency and if this were to occur, it would exacerbate its challenges in areas like Covid-19, a collapsing property sector and falling consumer confidence," Interactive Investor Head of Markets Richard Hunter said.

Europe

European shares were mostly higher on Friday, with the Stoxx Europe 600 index gaining 1.3 percent for the day — though all of its constituent indices are still down for the quarter.

The STOXX Europe 600 Index has lost 19.35 points or 4.75 percent in the quarter to 387.85, the German DAX is 669.41 points or 5.24 percent lower on the year at 12114.36 and France’s CAC 40 Index is down 160.52 points or 2.71 percent to 5762.34.

In London, the FTSE 100 Index is off 275.47 points or 3.84 percent for the quarter at 6893.81.

The situation of Credit Suisse Group AG, will be closely observed in Europe. Credit Suisse shares have fallen 21 percent this month, and spreads on its credit-default swaps, a type of insurance against default, climbed to their highest level of the year on Friday. The weakened market situation suggests that Credit Suisse may struggle to raise new shares to cover a planned restructuring and that its funding costs could rise significantly.

The Swiss bank is an enormous domestic business that serves all kinds of customers, and it competes globally in areas including wealth management, investment banking and asset management. Its shares have long traded at less than its book value, a widely watched measure by investors, as one management team after another failed to address the bank’s problems.

In a memo to staff on Friday, Chief Executive Ulrich Körner told employees the bank is at a “crucial point” ahead of the presentation of a strategy update that will spell out plans for the investment bank on Oct. 27. He said not to mistake its stock price performance for its capital strength and liquidity. The memo seemed to stoke new concerns, and spilled into a frenzy on Twitter and on Reddit investment message boards on Saturday and Sunday.

North America

US stocks slumped on Friday, sending two of the three main indexes to a losing week, month and quarter, as investors grappled with further evidence of persistently high inflation.

Major indexes have all fallen hard this year as the Federal Reserve hikes interest rates in an effort to bring inflation under control. According to Dow Jones Market Data, the S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite all notched their weakest first nine months of a calendar year since 2002 on Friday.

Major indexes locked in their losses for the quarter on Friday with another down day. The S&P 500 dropped 54.85 points, or 1.5 percent, to 3,585.62. The Dow Jones Industrial Average fell 500.10 points, or 1.7%, to 28,725.51. The Nasdaq Composite fell 161.89 points, or 1.5 percent, to 10,575.62.

Each of the three indexes closed at its lowest level since 2020. The Dow Jones Industrial Average is 21% lower in 2022, the S&P 500 is down 25%, and the tech-laden Nasdaq Composite has dropped 32%.

Because the central bank has made clear it is determined to get inflation under control, investors have become frightened that its series of rate increases will succeed in significantly slowing the economy.

“In the trade-off between growth and inflation, the Fed is going to choose inflation,” said Desmond Lawrence, senior investment strategist at State Street Global Advisors. “That’s really where you’re getting the choppiness that we’ve eaten last week especially.”

All three indexes declined for a third straight quarter. For the S&P 500 and the Nasdaq, it was the longest quarterly losing streak since streaks that ended in March 2009, according to Dow Jones Market Data.

The last day of the quarter delivered more evidence of the price pressures that the Fed is trying to wrangle. A measure of inflation that excludes volatile food and energy costs climbed to a 4.9 percent year-over-year increase from 4.7 percent the previous month, the Commerce Department reported. There was also a month-over-month gain.

“Really it’s just another sign that inflation is expanding,” said Eric Diton, president and managing director at The Wealth Alliance. “For whoever is watching the Fed, it’s ammo for the Fed to keep going with their rate hikes, which is just bearish for stocks and bonds.”

Among individual stocks, Nike shares slid $12.21, or 13 percent, to $83.12 after the sneaker giant said inventories rose 44 percent, while higher discounts and freight expenses were crimping profit margins.

Evidence of the surge came as new data revealed that the eurozone’s annual rate of inflation jumped to 10% in September amid Russian efforts to cut off the bloc’s supplies of gas, pushing up the cost of energy.