United States
US markets were closed on Monday for a public holiday, with equity futures edging higher as the S&P500 e-mini contract rose 0.07% while contracts on the Nasdaq100 rose 0.12%.
Historical data suggests that September has been a particularly poor month for stocks, with Wall Street’s fear gauge, the Cboe Volatility Index (VIX), rising each September since 2021. The upcoming US jobs report on Friday could further influence market direction, with traders pricing in a potential rate cut by the Federal Reserve.
Europe
European stocks ended the day with minimal movement as the Stoxx Europe 600 Index fell slightly by less than 0.1%. The market showed a late recovery after better-than-expected regional manufacturing data. However, overall trading volumes were significantly lower, more than 30% below the 30-day average, due to the US markets being closed for a public holiday. Retail and industrials were among the worst performers, while real estate shares led the advance.
Rightmove Plc’s 27% surge marked the most significant move on the day, fueled by reports that Australia’s REA Group Ltd. is considering a takeover offer. The European stock benchmark has rallied for four consecutive weeks, the longest streak since March, as optimism grows around the European Central Bank potentially lowering interest rates amidst signs of global economic stability.
Australia
The Australian stock market is set to open slightly higher today, with ASX200 futures up by 0.09% to 8,077, positioning the index near a record high. On Monday, the S&P/ASX 200 climbed 0.2% to 8109.9 points, just shy of its peak from late July. Gains were led by major banks such as Commonwealth Bank, which reached a new high, and energy stocks, buoyed by expectations of a near-term rate cut by the US Federal Reserve.
However, the mining sector weighed down the index due to concerns over China’s economic outlook and falling iron ore prices. Factory activity in China contracted for the fourth month in a row, leading to a drop in iron ore futures. This affected key mining stocks, while certain others, like Imugene, saw significant gains due to positive trial results.
Commodities
In the commodities market, oil prices fluctuated between small gains and losses as traders balanced the anticipated production increase from OPEC+ against economic concerns in China and lower output from Libya. Both WTI and Brent crude finished moderately higher, up by 0.67% and 0.77% respectively.
Meanwhile, iron ore faced renewed pressure, falling by 4% in London trading amid signs of continued distress in China’s real estate sector. Weak demand and oversupply concerns persist in the iron and steel markets, as underscored by Angang Steel’s eighth consecutive quarterly loss, reflecting the broader struggles within the sector as few Chinese steelmakers have turned a profit in 2024.
Economic Calendar
US: ISM Manufacturing PMI (MoM Aug) 00:00
This article was written by James Woods, Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
