AU Morning Wrap: ASX 200 Faces Worst Session Since April as S&P 500 Drops on Growth Fears
G'day, mooers! Check out the latest news on today's stock market!
• On Wall Street, the Dow Jones, the S&P 500 and Nasdaq lost between 1.2 per cent and 2.3 per cent, led by sharp losses in Nvidia and Atlassian.
• Australian shares tumbled minutes after the open on Friday, reflecting a sharp drop on Wall Street on concerns that the Federal Reserve is behind in cutting interest rates.
• Stocks to watch: RMD, SQ2
Wall Street Summary
It was a red day for the market after $Meta Platforms(META.US$'s earnings beat was quickly swept aside by morning earnings calls that hurt investor feelings. Most equities fell on the US market, including the most popular stocks searched on moomoo last week.
Just past 4 pm ET the $S&P 500 Index(.SPX.US$ fell 1.37%, the $Dow Jones Industrial Average(.DJI.US$ fell 1.21%, and the $Nasdaq Composite Index(.IXIC.US$ fell 2.30%.
Thursday, according to the Labor Department, Initial applications for US unemployment benefits jumped to 249,000 last week, the highest level in a year. Continuing claims, a number that is analogous to unemployment, rose to 1.88 million, the highest since 2021.
S&P Global PMI came in at 49.6 vs 49.5 expected, and ISM PMI came in at 46.8, lower than 48.8 expected.
The FOMC left rates unchanged Wednesday, and after the release at 2 pm ET, Federal Reserve President Jerome Powell answered press questions and said if all goes well, the FOMC would consider a rate cut in September.
For example, if inflation was moving down quickly or in line with expectations, growth remains reasonably strong, and the labor market remains consistent with its current condition, then I would think that a rate cut could be on the table at the September meeting," Powell said.
ADP nonfarm employment came out Wednesday, a precursor to overall nonfarm employment based on ADP employment tracking numbers. The firm said there were 122k added jobs.
The final macro data for the week arrives in the form of nonfarm monthly payroll employment data on Friday.
AU Market Watch
Australian shares fell sharply on Friday, mirroring a significant drop on Wall Street due to concerns that the Federal Reserve is delaying interest rate cuts. The $S&P/ASX 200(.XJO.AU$ dropped 2.17% to 7938.60, after hitting an all-time high the previous day, though it remained on track for a 0.7% weekly gain.
All sectors were down, with tech and real estate leading the decline, and major banks and mining companies also suffering losses. Energy companies fell following a drop in oil prices, despite a slight recovery in Brent crude and US West Texas Intermediate crude. The downturn on Wall Street was driven by disappointing manufacturing data and prospects of policy easing, affecting bond returns. The Reserve Bank of Australia is expected to keep the cash rate at 4.35% in its upcoming meeting, with a cautious outlook on inflation and GDP growth.
Commodity
Oil futures gave back earlier gains overnight, as global supply seemed largely unaffected by worries of a broadening Middle East crisis after the killing of a Hamas leader in Iran. Brent crude futures ended 1.6 per cent lower at $US79.52 a barrel, while US West Texas Intermediate crude dropped 2.1 per cent to $US76.31.
Crypto
As of latest data, $Bitcoin(BTC.CC$ is priced at $65,154, up by 0.61% in the past 24 hours, while $Ethereum(ETH.CC$ is priced at $3,204, down by 1.10% in the past 24 hours.
Stocks to Watch
Sleep apnea device maker $ResMed Inc(RMD.AU$ saw a 9% increase in revenue to $US1.2 billion ($1.85 billion) in the last quarter of fiscal 2024, raising quarterly dividends to US53¢ per share, a 10% increase.
Fintech company $Block Inc(SQ2.AU$ upgraded its full-year guidance and announced a new $US3 billion share buyback, citing strong growth in its buy now, pay later segment.
Economic Calendar (AEST)
11:30 am: Australia Home Loans (Jun)
11:30 am: Australia Producer Price Index (Q2)
10:30 pm: US Non Farm Payrolls (Jul)
Source: Dow Jones Newswires, AFR
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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