Why investors are very jittery about tonight’s US jobs report. Picture Getty
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The ASX is expected to tick up modestly when the market opens on Friday. At 8am AEST, the SPI ASX200 futures contract was pointing up by 0.1%.
Overnight, US tech stocks gave the Nasdaq a boost, but overall, Wall Street had a mixed day.
The S&P 500 was down 0.3%, the blue chips Dow Jones fell by 0.54%, and the tech heavy Nasdaq lifted by 0.25%.
Investor jitters are growing as concerns mount about how quickly the US economy is slowing down. All eyes are on the August jobs report, due out at 10.30pm AEST tonight, which could be a game changer.
If the report reveals fewer new jobs than expected and a rise in the unemployment rate, stocks might take a hit. The worry is that the Federal Reserve might not have acted fast enough to cut rates and prevent a recession.
“The danger in really ‘bad news’ is that even if the Fed is prepared to react aggressively, it might be too late to stave off real economic weakness,” said Steve Sosnick at Interactive Brokers.
In the run up to the figures, economic data have been all over the place. US services grew slowly, companies added the smallest number of jobs since early 2021, and unemployment claims came in lower than expected.
“Markets are still trying to figure out if the economy is slowing too much, and whether the Fed is behind the curve,” said Chris Larkin at E*Trade.
In stock news, Nvidia jumped 1% following an 11% slump over the past two sessions. Analysts from Bank of America suggested that this recent drop presents a good buying opportunity.
Tesla rose 5% after announcing that its Full Self Driving service, which is a paid add-on for driver assistance, is set to launch in Europe and China in early 2025. However, this depends on getting the necessary regulatory approvals first.
And Broadcom, which supplies chips to Apple and other major tech firms, has given a weak revenue forecast, suggesting that slower demand for products beyond AI is affecting its growth. Broadcom shares fell 7% after hours.
Meanwhile, crude oil futures rebounded by over 2% after OPEC+ decided to delay easing some of its voluntary production cuts. This means they won’t be flooding the market with extra oil.
Investors are on edge as they wait for tonight’s jobs market data out of the US.
The anxiety arises from last month’s disappointing report, which showed only 114,000 new jobs—far below the expected 176,000. The big miss had stirred up worries about the US economy’s health.
One factor behind that weak job figure could be Hurricane Beryl, which disrupted various regions and temporarily put 249,000 jobs on hold. While these jobs might bounce back once things settle, it just adds that extra uncertainty for investors.
The Fed Reserve is keeping a close eye on tonight’s data. It will play a key role in the bank’s next meeting, where they’ll discuss whether to cut interest rates.
The Fed is trying to balance inflation with economic growth, so this data will be crucial for shaping future decisions.
If the figures beat expectations, it could boost investor confidence.
“However, if they disappoint again, greater market volatility is likely, with implications for the value of the dollar and Treasury bond yields,” said Ernesto Di Giacomo at XS.com.
Gold price rose by 0.80% to US$2,515.84 an ounce.
Oil prices jumped 2%, with Brent crude now trading at US$72.80 a barrel.
The benchmark 10-year US Treasury yield slipped by 3 basis points (bond prices higher) to 3.73%.
The Aussie dollar climbed by 0.2% to US67.41 cents.
Bitcoin meanwhile was down 3% in the last 24 hours to US$56,125 and Ethereum also fell by 3% to US$2,373.
Australian Dairy Nutritionals (ASX:AHF)
AHF has raised $2.13 million through a share placement, which will support brand growth and operations. The company also secured a five-year exclusive supply deal with Mutree Science and Technology for distributing infant formula in China, targeting $2.5 million in sales in the first year. The deal leverages Mutree’s extensive e-commerce platform, M2C APP, which is well-established in the Chinese market.
Laramide Resources (ASX:LAM)
Laramide has secured an option to explore nearly 6,000 km² in Kazakhstan’s Chu-Sarysu Basin, a region known for its rich uranium deposits. The agreement with Aral Resources gives Laramide the right to acquire full ownership of the project and fund all exploration activities. The area is close to major uranium mines and includes promising sites for ISR (In-Situ Recovery) mining. The project’s exploration will focus on discovering new uranium resources, with the option agreement pending Toronto Stock Exchange approval.
Axel REE (ASX:AXL)
Axel is starting a geological reconnaissance and scouting program at its Itiquira Project in Central-West Brazil. The project area, covering 396 km², is similar to other major REE (Rare Earth Elements) and niobium sites in Brazil. The program will involve mapping, sampling, and shallow drilling to explore the area’s potential. This new exploration effort runs alongside ongoing programs at the Caladão and Caldas projects. Brazil is a key global supplier of niobium, with the Itiquira Project located in a region known for significant mineral deposits.
Compumedics (ASX:CMP)
The medical technology and diagnostics company reported record revenues of $49.7 million for FY24, up 17% from the previous year. Compumedics received $52 million in sales orders, a 22% increase, and turned a profit with an EBITDA of $2.5 million, reversing a $2 million loss in FY23. SaaS revenues from Somfit and Nexus 360 rose to $4.2 million, and sales of Somfit were started in the US. The company expects revenues to exceed $55 million and EBITDA to reach around $5 million in FY25, driven by the new SaaS offerings.
EQ Resources (ASX:EQR)
EQR has set new production records in August at its tungsten operations. Mt Carbine produced 9,040 mtu of tungsten concentrate, with a daily record of 571 mtu, thanks to upgrades in ore sorting and recovery equipment. Saloro also achieved a monthly record of 9,018 mtu. Overall, these improvements led to a 31% increase in tungsten output compared to the previous quarter.
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