United States
US markets saw mixed results overnight. The S&P 500 managed a modest 0.3% gain, while the Dow Jones slipped by 0.4%. A notable driver behind the market movement was the weaker-than-expected US job openings data, which raised expectations of a Federal Reserve rate cut. With job openings falling to a 10-month low, traders have largely priced in a September rate cut and anticipate further reductions in 2025. This shift sparked a rebound in bonds and helped lift the tech-heavy Nasdaq, which rose by 0.9%, led by gains in Alphabet (+8.8%) after the company avoided a potential court-ordered sale of Chrome. Apple also rose, hitting its highest levels in six months.
Meanwhile, American Bitcoin, a company linked to the Trump family, surged 34.5% on its first day of trading on the Nasdaq. The movements in the stock were so volatile that trading was halted several times during the first hour.
Europe
European stocks showed signs of recovery after a day of declines, with the Stoxx 600 rising by 0.7%. Key performers included healthcare and retail sectors, with drugmaker Genmab surging 5.1% following positive drug trial results, while sportswear company Adidas rose after an upgrade from Jefferies. In the automotive sector, however, the performance was more subdued, with Stellantis and Continental seeing losses of 2.7% and 2.5%, respectively.
The industrials sector performed well, with Schneider Electric and Airbus among the top gainers. On the flip side, the banking and energy sectors underperformed, with notable declines in Commerzbank and BP.
Brent oil prices inched down by 2.5% to $67.38 per barrel. Gold continued its record run, further supported by concerns over government debt and Fed policy, which boosted its appeal as a safe-haven asset.
Australia
The Australian market looks set for a positive start today, with ASX futures pointing up 0.4% to 8,756. This follows the positive sentiment from Wall Street, where tech stocks such as Alphabet and Apple recorded solid gains. Australian investors are particularly focused on the upcoming economic data releases, including the goods trade balance for July and household spending data. These will provide further insights into the strength of the Australian economy, especially in the context of global economic challenges and shifting market dynamics.
In corporate news, KMD Brands has unveiled a major transformation plan aimed at boosting profitability. The company’s focus on restructuring is expected to attract investor attention, particularly with the ongoing shift in consumer behaviour. Additionally, Worley, an engineering company, will remain in the spotlight after securing a significant contract for Inpex’s Abadi Project, which is expected to drive future growth. The engineering sector in Australia has seen increased demand due to a rise in global infrastructure projects, providing a tailwind for companies like Worley.
Commodities and currencies
In the commodities market, gold’s strong performance remains a key highlight, up 1.1%, reflecting investor sentiment driven by concerns about government debt and Fed policy. Oil prices, however, saw a notable drop of 2.2%, with Brent crude trading at $67.63 per barrel. The decline was attributed to concerns about future OPEC+ production levels, amid reports that the cartel could boost output to alleviate supply pressures.
The Australian dollar showed a modest rise of 0.5%, trading at 65.51 US¢, supported by the positive global risk sentiment generated by expectations of rate cuts from the US Federal Reserve. This has provided some relief to risk assets globally, including the Australian dollar. In the cryptocurrency market, Bitcoin posted a small gain of 1.4%, trading at $112,429. This rise in Bitcoin came as traders continued to speculate on the future of digital assets, with American Bitcoin’s 34.5% surge on its Nasdaq debut helping to fuel broader interest in the sector.
The broader currency market showed little movement, with the euro trading unchanged at $1.1662 and the Japanese yen also flat at 148.09 per dollar. The offshore yuan was stable at 7.1388 per dollar. These currencies remain sensitive to global developments, particularly any shifts in US Federal Reserve policy, which has a significant impact on global currency markets.
Economic Calendar
US:
- ADP Employment Change Aug 22:15
- Initial Jobless Claims Aug 22:30
- Trade Balance Jul 22:30
- S&P Global US Services PMI Aug 23:45
- S&P Global US Composite PMI Aug 23:45
- ISM Services Index Aug 00:00
AU:
- Trade Balance 11:30
This article was written by James Woods, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
