An unexpected lurch in unemployment to a 12-year high pushed the dollar lower as the stock market declined for a fifth straight session before paring its loss.
At lunchtime the ASX 200 was trading four points or 0.1% lower at 5508 but well above the three-week low set mid-morning at 5490. Gold stocks rallied 4.2% to top the sector gains, followed by metals & mining +0.6% and utilities+0.3%. I.T. -0.8%, health -0.3% and financials -0.3% suffered the biggest drops.
The market arrested its fall amid speculation about the impact on interest rates of news that the unemployment rate jumped to 6.4% last month from 6% in June, topping the US's jobless rate for the first time in seven years. The economy shed 300 jobs last month. Economists had anticipated a rise of at least 13,000, according to Fairfax and Forex Factory. The dollar dropped more than half a cent to 92.93 US cents following the report.
Most Asian markets were mired in red. China's Shanghai Composite rebounded from early losses to trade little changed, up 0.03%, Hong Kong's Hang Seng fell 0.46% and Japan's Nikkei 0.21%. Dow futures were recently up four points or less than 0.1%.
Crude oil futures bounced 24 cents this morning to US$97.09 a barrel. Spot gold was 70 cents firmer at US$1,307.60 an ounce.
The market reaction to the jobs news suggests a little buying on speculation that further rate cuts may be in store, or at the least, that the RBA won't hike any time soon. Funny old game, trading. Sometimes have to remind myself when I turn off the computer that, unlike the stock market, bad news in real life is just plain bad news, and good news is good. Trading: most of the excitement this morning obviously came in MEO. You were either on it or you weren't. I wasn't. [Sound of polite coughs, crickets chirping.] I'll now go and sit in a dark room and think about that. Instead I took CPU at obvious support, which held without giving anything like a decent bounce. Also took HCH on retrace but the trade was complicated by some cack-handed institutional selling. Was in the right place for ARI but didn't get filled. Missed one or two others but generally found trades hard to find today. Good to hear from Treasurehunter this morning. A shout-out to Giz, wherever he is.
