Closing Bell: Jobless jolt sends ASX to new high as Cup Day cut fever kicks in

• ASX closes 0.86% higher to reach a new 100-day high after hitting an intraday record 
• Australia’s unemployment rate climbs to four-year high of 4.5% in September, up from revised 4.3% in August
• Rate sensitive sectors including real estate, healthcare and financials performed strongly as hopes rise of Melbourne Cup Day rate cut 

The Aussie share market has closed up 0.86% to a new 100-day high of 9086.40 points on Thursday after hitting an intraday record at 9109.7. The market was buoyed by hopes of interest rate cuts following higher than expected September unemployment figures.

The jobs market showed clear signs of softening in September, boosting the likelihood of a Reserve Bank of Australia rate cut at its next meeting on Melbourne Cup day.

The unemployment rate climbed to a four-year high of 4.5% in September, up from a revised 4.3% in August, according to the latest Australian Bureau of Statistics figures.

The number of Australians who lost their job in September rose to 34,000, while the number of people who gained work was 15,000. Underemployment also rose from 5.7% to 5.9%.

Following release of the unemployment figures the Aussie dollar immediately fell 0.5% to 64.85 US cents, while the three-year bond yield dropped 12bps to 3.36%.

The moves suggest money markets are increasingly betting the RBA will cut interest rates at its November meeting, with State Street Investment Management APAC economist Krishna Bhimavarapu saying the labour market has clearly changed.

“The unemployment rate surged by 0.2% in September, hitting a four-year high — a risk we’ve been flagging for months.

“The RBA may hold steady for now, but this is no blip to brush off.

“We maintain our call – at least one rate cut is still on the table before year-end.”

Mixed US session as government shutdown enters third week

On Wall Street overnight, the tech-heavy Nasdaq rose 0.7%, the benchmark S&P 500 finished 0.4% higher, while the blue-chip Dow Jones Industrial Average finished down 0.1%.

Wednesday marked the start of the third week of the US government shutdown, as lawmakers failed to advance legislation to restore funding. Republicans and Democrats continue to disagree over spending priorities and healthcare provisions.

This marks the fourth government shutdown under President Donald Trump, and the first of his second term. The longest shutdown in US history – 35 days – occurred from December 22, 2018 until January 25, 2019, during Trump’s first term.

Gold remains the standout commodity, with the precious metal still pushing to new highs around US$4224 an ounce at the time of writing.

However, oil prices have tumbled to near Covid-era lows amid a perfect storm of OPEC+ ramping up production, escalating China/US trade tensions hitting demand, and the IEA forecasting a global supply surplus.

Asian markets were mixed today with the Nikkei up 0.99%, Hang Seng falling 0.43% and the SSE Composite Index up 0.09%. Bitcoin, meanwhile, is languishing a tad, currently trading near US$111,000.

Rate-sensitive real estate leads gainers

Rate-sensitive real estate stocks were the biggest winners today, with  Goodman Group (ASX:GMG) closing 4.39% higher,  Stockland (ASX:SGP) up 4.02% and Mirvac (ASX:MGR) 3.66% to the good.

It was another strong day for financials with robust performances across the ‘Big Four’ banks, while healthcare also had another good day with the biggest name in the local scene, blood products giant CSL (ASX:CSL), leading the sector higher with a gain of 2.10%.

Tech and utilities were the only sectors finishing in the red.

Today’s best performing stocks (including small caps):

In the news…

TrivarX (ASX:TRI) rose 145% today after announcing it intends to acquire 100% of the Stabl-Im IP and associated stable isotope cancer diagnostic IP from Nucleics Pty Ltd.

The technology is designed to provide safe imaging and monitoring of brain cancers through standard MRI using stable isotope labelling of replicating cells within the brain.

Nucleics’ founder and CEO is Dr Daniel Tillett, the CEO and managing director of Race Oncology (ASX:RAC). To fund the acquisition, TRI has secured commitments to raise $4.2 million in a share placement, cornerstoned by a $500,000 investment from Tillett.

American West Metals (ASX:AW1) rose 59% today after also raising funds through a placement, targeting $7m at an 18% premium to its 30-day VWAP.

The new capital will go to developing the West Desert project, home to a JORC resource containing indium, zinc, silver, copper and gold with potential for gallium and molybdenum to boot.

SQX Resources (ASX:SQX) has risen 26% today after coming out of a trading halt, announcing the acquisition of several gold and silver projects in North America.

SQX said the new assets were prospective for a combination of bonanza-grade vein-hosted mineralisation as well as epithermal vein and breccia systems.

“This is a transformative acquisition for SQX into the North American precious metals space, which is seeing significant investor interest and explorer success,” executive chairman Patric Glovac said. 

ASX Laggards

Today’s worst performing stocks (including small caps):

In Case You Missed it

Verity Resources’ (ASX:VRL) auger drilling has outlined a new, widespread REE zone at Pimenta with geological similarities to Halleck Creek project.

Aroa Biosurgery (ASX:ARX)  has recorded a fourth consecutive quarter of positive net cash flow since listing on the ASX in July 2020 with its highest quarter on record for Myriad products.

QPM Energy (ASX:QPM) has received the first tranche of a $113.7 million Master Lease Agreement with Macquarie Bank to fund construction of an Isaac Power Station.

Liberty Metals (ASX:LIB) is acquiring three Brazilian critical minerals projects that are prospective for titanium and rare earths.

Felix Gold (ASX:FXG) has confirmed the scale and continuity at the North West Array prospect, part of its Treasure Creek project in Alaska.

Last Orders

Ark Mines (ASX:AHK) has secured environmental authorisation from the Queensland government for its Sandy Mitchell rare earths project. It’s an important milestone in the project’s development as AHK moves to expand the project’s resource with a 219-hole program.

Aldoro Resources (ASX:ARN) has initiated a +9000-metre diamond drilling program at the Kameelburg project, targeting a high-grade niobium zone that produced intercepts of up to 4.14% niobium.

Trading Halts

BMG Resources (ASX:BMG) – pending response to ASX price query

European Lithium (ASX:EUR) – major divestment of shares in CRML

Jindalee Lithium (ASX:JLL) – cap raise

Hawk Resources (ASX:HWK) – acquisition and cap raise

Magmatic Resources (ASX:MAG) – cap raise

De.Mem (ASX:DEM) – acquisition and cap raise

Asian Battery Metals (ASX:AZ9) – drilling results and cap raise

Southern Palladium (ASX:SPD) – cap raise

Burgundy Diamond Mines (ASX:BDM) – extension to complete funding package negotiations

At Stockhead, we tell it like it is. While Ark Mines and Aldoro Resources are Stockhead advertisers, they did not sponsor this article.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.