Morning traders. Thanks loungers, especially @Ravgnome and @Patterns.
Outlook for the day: Neutral after Wall Street steadied overnight following Tuesday's plunge. The ASX 200 skidded 1.88% yesterday to its heaviest loss in around four weeks.
ASX futures: up 2 points or 0.03%
Overnight themes:
- US stocks finished mixed as signs of tightening in the labour market strengthened expectations for interest rate cuts.
- The Dow bounced 0.09% a day after tumbling 1.51% to its biggest loss in four weeks.
- The S&P 500 gave up 0.16% as global growth worries weighed on resource stocks, and tech struggled for a second night.
- The Nasdaq lost 0.3%. Nvidia gave up 1.66% after US authorities sent the firm a subpoena related to an antitrust probe. Apple and Amazon also fell.
- All three indices traded both sides of break-even as investors dipped their toes after a sell-off on Tuesday night that knocked the Nasdaq down 3.26% and the S&P 500 down 2.12%.
- “At least on the margins, you’re seeing some nibbling after that sell off yesterday. Investors are a bit on edge; it’s a low-conviction trade. Everyone’s waiting for this Friday employment report, and until then, we’re in a bit of a holding pattern” - co-chief investment officer at Truist, Keith Lerner (per CNBC).
- The prospect of interest rate cuts helped settle market nerves after job openings in the US shrank to the lowest in three and a half years. Total openings dropped by 237,000 in July to 7.673 million, a level last seen in January 2021.
- Also helping sentiment was a warning from Federal Reserve policy-maker Raphael Bostic that the central bank needs to start cutting rates to prevent job losses. "We must not maintain a restrictive policy stance for too long," Bostic wrote on the Atlanta Fed's website.
- A mixed market saw gains for the S&P utility sector +0.85%, consumer staples +0.52% and real estate +0.25%. Industrials and financials also inched higher.
- The night's biggest drags were energy -1.41%, materials -0.48% and tech -0.41%.
- Iron ore dropped in China to its lowest in more than a year after a report yesterday showed growth in services sector activity cooled more than expected last month during the peak summer holiday season. Benchmark ore finished 3.09% lower on the Dalian Commodity Exchange at US$96.95 a metric ton. Singapore futures declined 1.7% to US$92.
- “Last week’s blindly optimistic and irrational sentiment rally [in iron ore] is now being rationally unwound, as the market once again comes to terms with the realization of terrible downstream steel demand-side fundamentals in China” - Atilla Widnell, managing director at Navigate Commodities (per Reuters).
- Oil slumped to its weakest level in around 15 months amid reports of progress on resolving a political stand-off that has halted Libyan crude exports. Brent crude settled US$1.05 or 1.4% in the red at US$72.70 a barrel, its lowest finish since June 2023. The US benchmark - West Texas Intermediate - settled below US$70 a barrel for the first time this year at US$69.20.
- “Global growth concerns married with headlines of increasing supply proving to be a toxic mix for an oil market that is already feeling vulnerable” - Chris Weston, head of research at Pepperstone.
- US uranium miners rebounded from Tuesday's near-four-week low. The Global X Uranium ETF (URA) bounced 1.32%. Australian uranium miners were among yesterday's worst performers on the ASX 200.
Key events today:
- Trade balance - 11.30 am AEST
- Speech and Q&A with RBA Governor Bullock - 12 pm
- US private payrolls - tonight
- US unemployment claims - tonight
- US services PMI - tonight
S&P 500: down 9 points or 0.16%
Dow: up 38 points or 0.09%
Nasdaq: down 52 points or 0.3%
Dollar: up 0.17% to 67.24 US cents
Iron ore (Dalian): down 3.09% to US$96.95
Brent crude: down US$1.05 or 1.4% to US$72.70
Gold (futures): up US$3 or 0.12% to US$2,526
Gold (spot): up US$1 or 0.04% to US$2,494.28
Silver: up 21 US cents or 0.74% to US$28.26
NYSE Arca Gold Bugs: down 0.95%
Bitcoin: down 0.27% to US$57,996
Copper (LME): up 0.12% to US$8,965
Nickel (LME): down 2% to US$16,150
Lithium carbonate (China): down 0.27% to 73,850 yuan
Global X Lithium & Battery Tech ETF: up 0.25%
Uranium (spot): steady at US$79.75
BHP: down 0.17% (US); down 0.18% (UK)
Rio Tinto: down 0.41% (US); down 0.34% (UK)
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