Global Markets Report - 8 July
ASX set to open lower, while US stocks rose on expectations of rate cuts.
Australia
Australian shares are set to open lower, while US stocks rose on expectations of rate cuts.
ASX futures were down 0.14% or 11 points as of 8:00am on Monday, suggesting a lower open.
U.S. stocks climbed Friday as slowing jobs growth and an increase in the unemployment rate bolstered expectations of a Fed rate cut in September.
DJIA gained 67 points, or 0.2%, to 39,375, the S&P 500 rose 0.5% to 5,567 and the Nasdaq added 0.9% to 18,352. For the week the DJIA rose 0.7%, the S&P 500 gained nearly 2% and the Nasdaq climbed 3.5%.
In commodity markets, Brent crude oil was down 0.1% to US$86.54 a barrel, while gold was up 1.5% at US$2,392.16.
In local bond markets, the yield on Australian 2 Year government bonds was unchanged at 4.23% while the 10 Year yield was down at 4.40%. US Treasury notes were down, with the 2 Year yield at 4.60% and the 10 Year yield at 4.28%.
The Australian dollar was 67.47 US cents.
Asia
Chinese shares ended mixed, as investors looking for new catalysts ahead of key political meetings later this month. The benchmark Shanghai Composite Index closed down 0.3% at 2,949.93, the Shenzhen Composite Index was 0.5% higher, while the ChiNext Price Index gained 0.5%.The Communist Party will hold its Third Plenum in mid-July and China's Politburo meeting is expected by the end of this month. Among major stocks, insurance and bank stocks led the losses, with Ping An Bank dropping 2.8% and China CITIC Bank s 3.1% lower. Gainers included Aier Eye Hospital, which added 2.6% and SMIC, which was 1.0% higher.
Hong Kong shares ended lower, weighed by tech and auto stocks. Xiaomi dropped 1.3% and Lenovo was 1.95% lower. Tencent and Baidu declined 0.7% and 1.0%, respectively. AI company SenseTime slid 16%. Alibaba-backed RoboSense Technology dived 69% after its half-year lockup period after its IPO ended Thursday. Auto stocks ended broadly lower after the EU confirmed tariffs on Chinese-made electric vehicles. Great Wall Motor shed 0.8% and Li Auto was off 1.9%. The benchmark Hang Seng Index ended 1.3% lower at 17,799.61; the Hang Seng Tech Index dropped 1.45%.
The Nikkei Stock Average ended flat at 40,912.37 as declines in auto and shipping stocks offset gains in retail and pharmaceutical shares. Honda Motor shed 3.2% after its plan to offer shares worth billions of dollars. Mitsui O.S.K. Lines dropped 3.6%, while Eisai gained 1.6% and Isetan Mitsukoshi Holdings climbed 7.6%. The broader Topix index fell 0.5% to 2884.18. Investors will be focusing on U.S. jobs data due later in the day. The 10-year Japanese government bond yield fell one basis point to 1.070%.
Indian shares closed lower, dragged by steel and auto stocks. Investors are watching for more signs to determine if the Fed will cut interest rates in September, as well as earnings of major companies that start reporting next week. Among the top decliners, Tata Steel lost 0.85% and Tata Motors was down 0.5%. Meanwhile, State Bank of India gained 2.5% and NTPC was up 1.9%. Mahindra Lifespace Developers advanced 2.4% after winning major development deals. The benchmark Sensex closed 0.1% lower at 79,996.60.
Europe
Stocks in the U.K. slipped Friday, as the FTSE 100 Index fell 0.5% to 8203.93.
Among large companies, Softcat PLC posted the largest decline, dropping 6.6%, followed by shares of Old Mutual Ltd., which dropped 5.5%. Shares of Carnival PLC fell 2.7%.
Savills PLC was the biggest gainer during the session, surging 7.5%, and Ocado Group PLC surged 7.4%. 4imprint Group PLC rounded out the top three movers on Friday, as shares surged 5.6%.
In other parts of Europe, the STOXX Europe 600 Index fell 0.2% to 516.60, Germany's DAX rose 0.1% to 18,475.45 and France's CAC 40 slipped 0.3% to 7,675.62.
North America
U.S. stocks climbed as slowing jobs growth and an increase in the unemployment rate bolstered expectations of a Fed rate cut in September.
DJIA gained 67 points, or 0.2%, to 39,375, the S&P 500 rose 0.5% to 5,567 and the Nasdaq added 0.9% to 18,352. For the week the DJIA rose 0.7%, the S&P 500 gained nearly 2% and the Nasdaq climbed 3.5%.
Meta climbed 5.9% to a record close. Treasury yields fell and the dollar weakened, while gold prices climbed.
Data Friday showed the U.S. added 206,000 jobs last month, continuing a remarkably strong stretch of hiring. But the unemployment rate ticked up to 4.1%, adding to recent signs that the job market is gradually cooling.
Investors had been on edge about the labor market after surprisingly strong hiring in May dented hopes for interest-rate cuts this year. After Friday's jobs data, traders in interest-rate futures were betting that there is a 78% chance that the Fed will cut rates at least once by its September meeting, compared with 74% on Wednesday, before the July 4 holiday, according to CME Group data.
"September is a live meeting for a rate cut," said John Lynch, chief investment officer for Comerica Wealth Management, due to the weakening trend in job creation.
The S&P 500 has rallied 17% this year, fueled by investor enthusiasm for a small group of tech giants that are focused on creating or using artificial-intelligence technology.
On Friday, technology shares continued to rally. Tesla shares rose 27% for the week, their best since January 2023, extending a rally that has erased its losses for the year. Chip maker Advanced Micro Devices climbed 4.9%.