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Global Market Report - 09 September

Lewis Jackson  |  09 Sep 2021Text size  Decrease  Increase  |  
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The ASX is set to fall at the open after Wall Street and most global markets slipped lower.

The Australian SPI 200 futures contract was down 35 points or 0.5 per cent at 7,535 near 7.50 am Sydney time on Thursday, suggesting a negative start to trading.

US stocks fell overnight on investors' concerns about Covid-19 and uncertainty about when central banks may dial back easy-money policies.

The S&P 500 was down 0.1%. The Dow Jones Industrial Average retreated 0.2%. Meanwhile, the tech-heavy Nasdaq Composite fell 0.6% as large technology stocks fell.

US stocks have lost steam in recent days as investors assessed the rise in coronavirus cases and a weaker-than-expected jobs report on Friday. Money managers are awaiting fresh cues from the Federal Reserve and the European Central Bank about how signs of a slowing economic recovery and high inflation levels may influence their plans to taper monetary stimulus.

The Australian dollar was buying 73.62 US cents near 7.50am AEST, down from the last close of 73.86. The WSJ Dollar Index, which measures the US dollar relative to 16 foreign currencies, rose to 87.39.

Locally, the S&P/ASX 200 closed 0.2% lower at 7512.0, weighed down by mining stocks. Gold miners were the biggest drag on the materials sector, which fell 1.0%. Newcrest, Evolution and Northern Star fell by between 2.9% and 5.3%, while ex-dividend St. Barbara dropped 6.1%. Fortescue, Rio Tinto and BHP fell by between 0.4% and 1.0% amid lower iron-ore futures.

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Consumer staples and tech stocks were also weak, with WiseTech, Xero and Afterpay shedding 1.0%, 0.5% and 1.6%, respectively.

The financial sector was the only one to make meaningful gains, rising 0.6% as Macquarie jumped 4.7% on stronger-than-expected 1H guidance. The ASX 200 is about 1.5% lower so far this week.

Australia's job market showed signs of stalling in August. The National Skills Commission reports that skilled job vacancies were down 5.6% in August, the biggest monthly fall in 16 months. The cumulative number of job ads are down 9.1% since June, much less than the record falls seen in last year's national lockdown.

Gold futures fell 0.3% to $US1793.50 an ounce; Brent crude was up 1% at $US72.39 a barrel; Iron ore was down 4.2% to $US132.19.

The yield on the Australian 10-year bond rose to 1.29%; The yield on the US 10-year note slipped to 1.34%.


Chinese stocks finished mixed on Wednesday, as coal miners and electric power companies advanced while liquor makers dragged. Amid supply tightness in the electricity market, companies could raise prices, which will boost their earnings, Tianfeng Securities said. The Shanghai Composite Index ended flat, a tad below this year's highest closing level set in February.

Hong Kong shares fell amid-broad based losses, with energy majors among notable decliners. Expectations of slowing GDP growth in China likely weighed on investor sentiment. The benchmark Hang Seng Index closed 0.1% lower, while the Hang Seng Tech Index dropped 0.2% to 6871.28. Tencent Holdings rose 1.75% while Meituan moved 1.4% higher.

Japanese stocks advanced, led by gains in tech stocks, as hopes continued for an economic stimulus. The Nikkei Stock Average rose 0.9% to its highest close since March 18. Investors remained focused on any developments related to the ruling Liberal Democratic Party's leadership election.


London’s FTSE 100 moved 0.75% lower to 7095.53 on Wednesday.

The pan-European STOXX Europe 600 index, which tracks the return of the largest listed companies across 17 European countries, closed 1.06% lower to 467.87. Investors are selling out of European stocks ahead of Thursday's meeting of the European Central Bank, because of rising expectations that policy makers will discuss scaling back asset purchases, according to Antonio Cavarero, head of investments at Generali Investments.

"The trigger comes from the soon-to-be slow process of tapering," Mr. Cavarero said. "It is right for the ECB to start talking about tapering. It is appropriate for them to take some support away, but they will fine-tune and bring it to lower levels."

North America

US stocks fell Wednesday on investors' concerns that Covid-19 cases remain elevated and uncertainty about when central banks may dial back easy-money policies.

The S&P 500 declined 5.96 points or 0.1%, to 4514.07. The Dow Jones Industrial Average retreated 68.93 points, or 0.2%, to 35031.07. Meanwhile, the tech-heavy Nasdaq fell 87.69 points, or 0.6%, to 15286.64 as large technology stocks dropped.

Stocks have lost steam in recent days as investors assessed the rise in coronavirus cases and a weaker-than-expected jobs report on Friday. Money managers are awaiting fresh cues from the Federal Reserve and the European Central Bank about how signs of a slowing economic recovery and high inflation levels may influence their plans to taper monetary stimulus.

"For so long, there's been a glass half-full view," said Aoifinn Devitt, chief investment officer at financial advisory firm Moneta. "There was so much toward the upside, latching on to the growth narrative. Nothing has changed really, but some negative exogenous factors such as Afghanistan, Hurricane Ida and Friday's jobs report, which have combined to dampen the sentiment in the current week."

The S&P 500 index, which has risen more than 20% so far this year, is making investors wonder if the same pace of gains will carry to the second half.

"There's been an almost universally positive tone among investors...That's kind of held things up for now, but is that sustainable?" said Mark Hackett, chief of investment research at Nationwide, an insurance and financial services company.

Biopharmaceutical company Kadmon soared $3.77, or 71%, to $9.07 after it agreed to be acquired by Paris-based healthcare firm Sanofi for $1.9 billion. Sanofi shares declined $1.44, or 2.8%, to $50.12. PayPal dropped $8.03, or 2.7%, to $285.23 after saying it would purchase Japanese "buy now, pay later" startup Paidy for $2.7 billion.

Bitcoin's selloff eased Wednesday, as it edged about 1.9% lower from its 5 p.m. New York time level on Tuesday to trade at about $45,896.30 apiece, according to CoinDesk. The price plunged as much as 17% briefly on Tuesday, and ended the day down about 10%.

Shares of cryptocurrency exchange Coinbase fell $8.6, or 3.2%, to $258.20. The company said Wednesday that the Securities and Exchange Commission has threatened to sue if it launches a program that lets users earn interest by lending crypto assets.

Job openings for July rose to 10.9 million compared with 10.2 million from the last month, according to the Labor Department. Economists surveyed by The Wall Street Journal expected the report to show 10.1 million unfilled jobs.

The US economic recovery slowed over the summer as a resurgence of Covid cases linked to the Delta variant caused consumers to pull back from taking trips or dining out, a new Federal Reserve report found. The report, known as the Beige Book, collects anecdotes from businesses around the country.

"The hard data in the jobs report on Friday and the Beige Book, all of that is corroborating what we're seeing, which is that we've definitely taken a hit in the economy," said Lori Van Dusen, founder and chief executive officer at LVW Advisors, a financial investment advisory firm.

is a reporter and data journalist with Morningstar. Tweet him @lewjackk or get in touch via email

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