Outlook for the day: Futures action points to a triple-digit opening fall for the ASX 200 following Wall Street's worst week since March 2023.
ASX futures: down 102 points or 1.28%
Friday themes:
US stocks slid on Friday as employment data implied the jobs market was slowing, but not by enough to push the Federal Reserve into a 50 basis point rate cut this month.
The S&P 500 and Dow slumped to their worst weekly losses since March 2023. The Nasdaq's weekly fall was its largest since January 2022.
A mixed August employment report did little to clarify the interest rate outlook. Total employment increased less than expected, but the jobless rate dipped to 4.2%, likely dashing hopes for a half-point rate cut. Non-farm payrolls increased by 142,000, falling short of the 160,000 increase forecast by economists. June's payroll gains were revised sharply downwards by 61,000 to 118,000.
"Businesses are still adding to payrolls but not as indiscriminately. The Fed will likely cut by 25 basis points and reserve the right to be more aggressive in the last two meetings of the year" - Jeffrey Roach, chief economist at LPL Financial (per Reuters).
Growth stocks led the retreat amid questions whether the Federal Reserve have left it too late to start lowering rates. The Magnificent Seven group of market leaders saw declines of 4.02% for Alphabet, 3.65% for Amazon and 8.45% for Tesla.
Nvidia shed 4.09% after Broadcom missed Q4 revenue expectations. Shares in Broadcom slumped 10.36%. The Philadelphia SE Semiconductor index dropped 4.52%, sealing its worst weekly loss since 2020.
The S&P 500 gave up 1.73% as all 10 of 11 sectors declined. The three sectors dominated by the Magnificent 7 (tech, communication services, consumer discretionary) lost between 2.4% and 2.9%. Financials and materials declined 1.57% and 1.35%, respectively. Real estate offered a haven, finishing just above even.
The Nasdaq lost 2.55%. The Dow declined 1.01%. Those losses sealed weekly deficits of 5.8% and 2.9%, respectively. The S&P 500 lost 4.3% for the week.
Iron ore fell for a sixth session but finished well above its intraday low amid reports of some short-covering. Benchmark ore on the Dalian Commodity Exchange pared its fall to less than 0.1% in afternoon trade, but still lost more than 10% across the week, according to Reuters.
Oil posted its weakest close since December 2021 as global growth worries continued to depress prices. Brent crude sank US$1.63 or 2.2% on Friday to US$71.06 a barrel and a weekly loss of 7.6%.
Battery metal miners came in for particularly heavy treatment as lithium prices continued to slide in China, and nickel dropped below US$16,000 a metric ton in London. The Global X Lithium & Battery Tech ETF slumped 4.71% in the US to its lowest close since July 2020. Albemarle shed 6.9%. SQM gave up 4.22%
Key events this week:
China inflation data (CPI, PPI) - 11.30 am AEST
Consumer sentiment - Tuesday
Business confidence - Tuesday
US consumer inflation data (CPI) - Wednesday
US wholesale inflation data (PPI) - Thursday
US unemployment claims - Thursday
S&P 500: down 94 points or 1.73%
Dow: down 410 points or 1.01%
Nasdaq: down 437 points or 2.55%
Dollar: up 0.01% to 66.69 US cents
Iron ore (Dalian): down 0.07% to US$96.49
Brent crude: down US$1.63 or 2.2% to US$71.06
Gold (futures): down US$18.50 or 0.73% to US$2,524.60
Gold (spot): down US$30.23 or 1.2% to US$2,487
Silver: down 90 US cents or 3.14% to US$27.93
NYSE Arca Gold Bugs: down 2.67%
Bitcoin: up 0.51% to US$54,370
Copper (LME): down 1.06% to US$8,996
Nickel (LME): down 1.15% to US$15,893
Lithium carbonate (China): down 1.22% to 72,600 yuan
Global X Lithium & Battery Tech ETF: down 4.71%
Uranium (spot): up 0.56% to US$80.50
BHP: down 2.13% (US); down 1.93% (UK)
