Day trading pre-market open September 4

Morning traders. Thanks loungers, especially @Ravgnome and @Patterns.


Outlook for the day: Severely negative after Wall Street launched the new month the same way it started August: with a recession panic.

ASX futures: down 94 points or 1.17%


Overnight themes:

• US stocks tumbled after soft factory data reignited economic growth worries, and investors soured on market-leading AI chip stocks.
• The S&P 500, Dow and Nasdaq all suffered their heaviest falls since early August as the market entered one of its historically-weakest months of the year.
• The sell-off started with news that US manufacturing activity contracted for a fourth straight month. The Institute of Supply Management's manufacturing index edged up to 47.2 from an eight-month low of 46.8, but remained well below the 50-point level that separates expansion from contraction.
• US manufacturing “remains in a recession with little sign that the situation will change any time soon, but we’ll of course see to what extent, if much at all, some rate cuts will help result in some more activity” - Peter Boockvar, chief investment officer at Bleakley Financial Group (per MarketWatch).
• The Nasdaq gave up 3.12% as AI poster child Nvidia plunged 9.53%. The Philadelphia SE Semiconductor index of chip-makers shed 7.75%. Broadcom is due to release earnings on Thursday.
• The S&P tech sector dropped 4.43% to its biggest loss since September 2022.
• "Such a massive amount of money has gone to tech and semiconductors in the last 12 months that the trade is completely skewed. Since the Fed paused rate increases a year ago, more than $30 billion has flowed into U.S. technology-related ETFs; meanwhile all other sector ETFs lost $10 billion... Imbalances like this can persist for a while, but eventually, the steam runs out of the trade" - Todd Sohn, ETF strategist at Strategas (per Reuters).
• The Dow fell 1.51% after posting back-to-back record highs last weeks. Twenty-four of its thirty component companies declined, led by Intel, Goldman Sachs and global economic bellwethers Boeing, Dow and Caterpillar.
• The S&P 500 lost 2.12%. Besides tech (-4.43%), notable falls included energy -2.41%, materials -2.29% and industrials -2.27%.
• Two S&P sectors weathered the carnage: consumer staples +0.76% and real estate +0.27%.
• ASX heavyweights BHP and Rio Tinto fell heavily on overseas exchanges after iron ore suffered a second-straight 4%+ setback in China. A day after its biggest one-day drop in nearly two years, benchmark ore on the Dalian Commodity Exchange sank 4.37% to US$98.79 a metric ton. Prices tumbled on Monday after weekend data showed factory activity contracting at the fastest pace in six months. BHP skidded more than 5% in US trade overnight. Rio dropped 4.63%.
• Copper and most other US dollar-denominated base metals wilted under a rising greenback and China growth worries. Benchmark copper futures fell 2.12% on the London Metal Exchange. Nickel declined 1.14%.
• Oil turned negative for the year as soft Chinese and US manufacturing Purchasing Managers' indices signalled weak growth. Brent crude skidded US$3.21 or 4.4% to US$70.34 a barrel, a level last seen in mid-December.
• “Commodities are getting smoked for the second day in a row. The selling is generic. Global Purchasing Managers’ Indices are poor. There’s no strong expectations of a demand (recovery)” - an unnamed trader quoted by Reuters.

Key events today:

• Q4 GDP - 11.30 am AEST
• China services PMI - 11.45 am
• US job openings - tonight

S&P 500: down 119 points or 2.12%

Dow: down 626 points or 1.51%

Nasdaq: down 577 points or 3.26%

Dollar: down 1.1% to 67.12 US cents

Iron ore (Dalian): down 4.37% to US$98.79

Brent crude: down US$3.21 or 4.4% to US$70.34

Gold (futures): down US$4.60 or 0.18% to US$2,523

Gold (spot): down US$4.68 or 0.19% to US$2,492.52

Silver: down 48 US cents or 1.67% to US$28.04

NYSE Arca Gold Bugs: down 3.74%

Bitcoin: down 1.91% to US$58,079

Copper (LME): down 2.12% to US$8,988

Nickel (LME): down 1.14% to US$16,480

Lithium carbonate (China): down 0.8% to 74,050 yuan

Global X Lithium & Battery Tech ETF: down 3.38%

Uranium (spot): steady at US$79.75

BHP: down 5.06% (US); down 3.2% (UK)

Rio Tinto: down 4.63% (US); down 2.33% (UK)