Australia

Australian shares are set to edge lower following a dip on Wall Street, with major indices ending lower for the third consecutive week. US markets are shut on Monday on account of Labor Day.

ASX futures were down 16 points or 0.2% at 6792 as of 7:00am on Monday, pointing to a slip at the open.

In the US, major indexes initially surged after the release of the US jobs report but turned lower midday, capping a third consecutive week of losses. The end-of-week moves continued a stretch of turbulence that dragged the S&P 500 down 3.3% for the week and 8.3% over the past three weeks.

Some traders said light activity ahead of a holiday weekend in the U.S. helped exacerbate stock swings in both directions, with the S&P 500 notching one of its largest intraday moves since April.

The S&P 500 fell 42.59 points, or 1.1%, to 3924.26. The tech-focused Nasdaq lost 154.26 points, or 1.3%, to 11630.86, falling for a sixth consecutive session in its longest losing streak since August 2019. The Dow Jones Industrial Average shed 337.98 points, or 1.1%, to 31318.44. The Nasdaq tumbled 4.2% for the week, while the Dow shed 3%.

In commodity markets, Brent crude lost 6% last week to end at US$93.02 a barrel as energy prices have recorded some of their biggest swings in history and many traders are closely tracking the crisis in Europe, with electricity prices surging ahead of the winter heating season. Gold gained 0.9% to end at US$1,712.19.

In local bond markets, the yield on Australian 2 Year government bonds dropped to 2.98% while the 10 Year fell to 3.64%. Overseas, the yield on 2 Year US Treasury notes gained to 3.39% and the yield on the 10 Year US Treasury notes was up at 3.19%.

The Australian dollar hit 68.10 US cents. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies edged down to 100.94.

Asia

Chinese shares finished mixed, as continued Covid-19 outbreaks in the country dragged consumer-related sectors, while telecommunications and electronics shares strengthened. Travel retailer China Tourism Group lost 3.5%, liquor maker Luzhou Lao Jiao fell 2.2% and auto maker BYD Co. was 1.6% lower. The latest U.S. curbs on sales of high-end processors to China could speed up local companies' purchases of domestically produced chips, Huatai Securities says in a note. Semiconductor Manufacturing International Corp. rose 1.1%. The Shanghai Composite Index ended flat at 3186.48, but logged a weekly loss of 1.5%. The Shenzhen Composite Index climbed 0.4% and the ChiNext Price Index was flat at 2533.02.

Hong Kong's Hang Seng Index fell 0.7% to 19452.09, dragged by property stocks, as Covid-19 outbreaks in China weighed on sentiment. Country Garden Services topped laggards with a 12% slide, while Country Garden Holdings was down 6.1% and China Resources Land retreated 4.5%. Covid-19 lockdowns in some Chinese cities add uncertainty to property sales recovery in the near term, Nomura analysts said in a note. Auto makers also weighed. BYD Co. extended its losing streak to the fifth session, down 1.8%, while XPeng fell 5.2% to an all-time closing low. The benchmark index lost 3.6% this week.

The Nikkei Stock Average ended flat at 27650.84 in choppy trade, amid expectations that the U.S. Fed will likely raise interest rates higher-for-longer. Investors are focusing on the upcoming U.S. payrolls report later in the global day, and next week's Japanese economic data which includes July household spending. Aviation stocks were lower despite a further easing of border controls by the Japanese government. Japan Airlines lost 1.8% and ANA Holdings closed 1.3% lower. Yen movements would be closely watched after the currency reached a 24-year low versus the U.S. dollar. USD/JPY was last at 140.29 compared with 140.20 late Thursday in New York. The yield on the 10-year JGB was flat at 0.235%.

Europe

The pan-European STOXX Europe 600 Index was down 10.12 points or 2.37% last week to 415.97, the German DAX was up 78.80 points or 0.61% last week to 13050.27, while the French CAC 40 index ended the week down 106.75 points or 1.70% at 6167.51.

In London, the FTSE 100 bounced back on Friday, recovering from losses earlier in the week, and closed 1.9% higher. "After U.S. stocks broke a four-day losing streak overnight, the FTSE 100 has eked out modest gains, supported by a broad range of companies caught up in the sell-off," Russ Mould from AJ Bell said.

Shell and BP were among the best performers, as oil rebounded from large drops on Thursday. BP rose 2.8%, and Shell increased 2.2% despite reports that CEO Ben van Beurden will step down next year. The top riser on Friday was investment group abrdn--which is on its way down to the FTSE 250 index.

North America

A late-summer selloff in the stock market accelerated in a volatile session Friday, with investors betting an encouraging monthly jobs report wouldn't ultimately alter the Federal Reserve's course on interest rates.

Major indexes initially surged after the release of the jobs report but turned lower midday, capping a third consecutive week of losses. The end-of-week moves continued a stretch of turbulence that dragged the S&P 500 down 3.3% for the week and 8.3% over the past three weeks.

Some traders said light activity ahead of a holiday weekend in the U.S. helped exacerbate stock swings in both directions, with the S&P 500 notching one of its largest intraday moves since April.

The S&P 500 fell 42.59 points, or 1.1%, to 3924.26. The tech-focused Nasdaq lost 154.26 points, or 1.3%, to 11630.86, falling for a sixth consecutive session in its longest losing streak since August 2019. The Dow Jones Industrial Average shed 337.98 points, or 1.1%, to 31318.44. The Nasdaq tumbled 4.2% for the week, while the Dow shed 3%.

At first, the monthly jobs report appeared to hit a sweet spot for investors.
The US Labor Department said the U.S. economy added 315,000 jobs in August -- roughly in line with what economists surveyed by The Wall Street Journal had expected.
Meanwhile, wage growth came in below what investors and analysts had forecast, an encouraging sign for the path of inflation. Some analysts referred to it as a "Goldilocks" report -- strong enough to soothe fears about a slowing economy, but not so strong as to stir concerns about an even more aggressive path of interest rate hikes ahead.

"This is certainly not a recessionary labor report," said Mona Mahajan, senior investment strategist at Edward Jones.

The optimism proved to be short-lived. By the afternoon, major indexes had given up those gains and traded lower. Several investors said the jobs number was encouraging but didn't change their views on the Fed's path forward. The path of rate increases remains the paramount concern of investors, and many are worried the central bank's aggressive tightening may tip the economy into a recession.

Since Fed Chairman Jerome Powell's speech in Jackson Hole on Aug. 26 when he reaffirmed the central bank's commitment to curbing inflation, traders have ramped up wagers on a faster pace of interest rate increases and ditched their stock bets.

"We are fundamentally negative on the market right now just because of the Fed," said Matthew Tym, managing director and head of equity derivatives trading at Cantor Fitzgerald.
Mr. Tym said that light trading activity ahead of the long weekend meant that positive and negative news could drive bigger moves in the market. "I think most of the seats on the street are empty today," he said.

The Bloomberg Global Aggregate Total Return Index, which tracks government and investment-grade bonds, entered a bear market Thursday, defined as a drop of at least 20% from its high. That makes it the biggest drawdown since the index's inception in 1990 and the first bear market for bonds in a generation, according to UBS Group.

Many investors remain fearful that the worst isn't yet over for stocks this year.
Traders have leaned into bearish positions on stocks through the market for S&P 500 futures and yanked money from stock funds. Investors pulled a net $10.6 billion from equity mutual funds and ETFs in the week ended Wednesday, the largest weekly outflow since the period ended June 15, the day before the S&P 500's lowest close this year.

"I think it was a bear market rally," said Aashish Vyas, investment director at Resonanz Capital, of the surge in the stock market earlier in the summer. "Pretty much everyone I talk to is looking at it, shaking their head."

In corporate news, shares of Lululemon Athletica jumped $19.72, or 6.7%, to $314.17 Friday after the sportswear company reported higher-than-expected quarterly sales.

Shares of Nvidia were among the worst-performing in the S&P 500 for the week, falling more than 16% after the chip maker reported new requirements regarding shipments of its chips to China.

The PHLX Semiconductor index dropped 7.1% for the week and on Thursday completed its longest run of declines of more than 1% since January 2016, according to Bespoke Investment Group.