Good morning to the hardy few turning up on a public holiday in much of the country. Yes, the ASX is open today, but trading volumes are likely to be light. A reminder that Daylight Savings kicked in over the weekend in the states that observe it.
Outlook for the day: Futures point to a negative start, but a last-minute funding bill to avert a US government shutdown may soften the blow.
ASX futures: down 38 points or 0.54%
Friday/weekend themes:
Wall Street's main indices finish mixed on the last session of a losing month and quarter. The S&P 500 and Dow tick lower, while the Nasdaq edges higher.
The threat of a government shutdown weighs as investors assess mixed inflation data.
The Federal Reserve's preferred measure of inflation, core Personal Consumption Expenditures, eases to 3.9% year-on-year, the lowest reading in more than two years. However, the headline PCE (which includes energy prices) pops 0.4% in August.
“Friday’s PCE on a core basis, which removes food and energy prices, suggests that inflation is continuing to decelerate, meaning the Fed’s aggressive campaign is working. The challenge is that core PCE remains almost double the Fed’s 2% target, prompting the Fed to keep the possibility of another rate hike in play” - Carol Schleif, chief investment officer at BMO Family Office.
Treasury yields continue to back off 16-year highs. The US 10-year yield falls more than two basis points.
Stocks fade in afternoon trade as Republicans reject a bill to provide temporary funding for the federal government. A breakthrough comes later over the weekend as Congress passes a stop-gap bill to fund the government for 45 days through to November 17.
Rate-sensitive sectors resist Friday's selling. Tech gains 0.39%, real estate 0.35% and utilities 0.21%. Energy and financials fall hardest.
For the quarter, the S&P 500 sheds 3.6%, the Dow 2.6% and the Nasdaq 4.1%. For the month, the S&P 500 loses 4.9%, the Dow 3.5% and the Nasdaq 5.8%.
Oil dips at the end of a a huge quarter. The international benchmark, Brent crude, eases 7 US cents after gaining 2.2% for the week, 9.7% for September and 27.3% for the quarter.
Key events this week:
Public holiday in NSW, Queensland, SA and ACT - today
China Golden Week public holiday - all week
US manufacturing, speech by Fed Chair Powell - tonight
Australia interest rate decision - tomorrow
Job ads, building approvals - tomorrow
US September private payrolls - Wednesday
Australia trade balance - Thursday
US September employment report - Friday
S&P 500: down 12 points or 0.27%
Dow: down 159 points or 0.47%
Nasdaq: up 18 points or 0.14%
Dollar: up 0.12% to 64.34 US cents
Iron ore (Dalian): untraded at US$116.64 (Golden Week holiday in China)
Brent crude: down 7 US cents or 0.1% to US$95.31
Gold: down US$12.50 or 0.67% to US$1,866.10
NYSE Arca Gold Bugs: down 0.52%
Copper (LME): up 0.64% to US$8,270.50
Nickel (LME): down 1.02% to US$18,694
Lithium carbonate (China spot): untraded at US$23,538 (Golden Week holiday in China)
