Market Highlights: ASX braces for big fall after US jobs miss; VanEck launches ASX's first defence ETF

ASX faces a rough start as US job figures miss expectations
Nvidia and Broadcom hit hard by a chip stock sell-off
VanEck to launch Australia’s first global defence ETF

The ASX is in for a rough start on Monday after US job figures came in much worse than expected. At 8am AEST, the SPI ASX200 futures contract was pointing down by 1.3%.

On Friday, the S&P 500 was hammered d0wn 1.73% after the crucial jobs report, the blue chips Dow Jones fell by 1.01%, and the tech heavy Nasdaq crumbled by 2.55%.

There’s talk that the Federal Reserve might have missed the boat on dodging a recession in the world’s top economy after the much anticipated payrolls data on Friday missed estimates by a long shot.

US non-farm payrolls climbed by 142,000 vs 160,000 forecasted for August. But the good news is, the unemployment rate ticked down to 4.2%, its first drop in five months.

“All of this does little to clear-up the debate over the September Fed meeting,” said Michael Brown at Pepperstone.

“Doves will point to a cooling pace of headline payrolls growth as potential reasoning for a larger 50bp cut,” Brown said, adding that hawks will opt for a more modest 25 basis point move.

“My base case remains for the latter, particularly given the risk the Fed runs of sparking a market panic were a larger cut to be delivered.”

Jens Foehrenbach at Man Group added,” Valuations [of stocks] are somewhat inflated and don’t incorporate a hard landing. Therefore, any negative surprise can trigger an outsized market reaction.”

The 10-year Treasury yield fell roughly 4 basis points after the release.

To stocks news, Nvidia dropped 4%, hit hard by a broader sell-off in chip stocks.

Taiwan Semiconductor, Advanced Micro Devices , and chip-making giant ASML each slid heavily down.

Apple supplier, Broadcom, also fell more than 10% after a lacklustre sales forecast. Despite the company riding high on the AI boom, other parts of the business are not pulling their weight.

Apple, meanwhile, will showcase its new iPhone and Apple Intelligence AI platform when the annual iPhone event kicks off later tonight.

Back home, Westpac has this morning named Anthony Miller, the current head of its business and wealth division, to take the reins starting in December to replace Peter King

In his farewell speech, King outlined a few reasons behind his retirement decision, among them losing interest in the daily news grind, wanting to explore new things, and needing more time with his family.

VanEck to launch defence ETF on ASX, Australia’s first

In an Australian first, VanEck is launching a global defence ETF on September 12 on the ASX.

The VanEck Global Defence ETF (ASX: DFND) will give investors a stake in top defence companies across areas like aerospace, communications, and security software.

With global tensions rising, people are rethinking how to invest in the defence/military sector.

According to a 2023 report by SIPRI, military spending hit $2.43 trillion, the biggest jump since 2009, and it’s set to grow nearly 40% to $3.1 trillion by 2030.

“The world’s changed a lot from the days when we celebrated cuts in defence spending,” said VanEck’s CEO Arian Neiron.

“Now, countries are increasing their military budgets, and investors are adjusting to this trend.”

He added, “Defence companies often benefit from stable government contracts and drive tech advancements that end up in everyday products like GPS and EpiPens.”

With the launch of DFND, VanEck now has 43 ETFs on the ASX.

To other markets …

Gold price fell by 1% to US$2,487 an ounce.

Oil prices slumped 2%, with Brent crude now trading at US$71.06 a barrel.

The benchmark 10-year US Treasury yield slipped by 4 basis points (bond prices higher) to 3.69%.

The Aussie dollar fell by 1% to US66.72 cents.

Bitcoin meanwhile was up 2% in the last 24 hours to US$54,824 and Ethereum also rose by 2% to US$2,310.

5 ASX small caps to watch today

Prospect Resources (ASX:PSC)
Recent drilling at the Mumbezhi Copper Project has shown strong results, expanding high-grade copper at the Nyungu Central deposit. Key findings include 64.3 metres at 0.53% copper and 12.0 metres at 1.13% copper, among others. Additional promising results came from previously un-assayed holes, supporting the potential to grow the Nyungu deposits. Three drilling rigs are currently at work, with a fourth arriving in September to accelerate the exploration program for the rest of the year.

Adacel Technologies (ASX:ADA)
Adacel has been confirmed by the FAA (Federal Aviation Administration) to continue its Tower Simulation System contract, which started in December 2023. The contract, valued at US$59 million over five years, involves maintaining and upgrading simulation systems. The FAA’s decision to stick with Adacel means the company will keep delivering under the contract. Adacel now expects an EBITDA of between $4 million and $5 million for FY25.

Euro Manganese (ASX:EMN)
EMN has signed an offtake term sheet with FeMoCat for high-purity manganese sulphate and magnesium carbonate from its Chvaletice Manganese Project in the Czech Republic. FeMoCat, which makes industrial catalysts, will use these products at its nearby plant. The term sheet covers a portion of the project’s manganese and magnesium output, with the final details to be outlined in a binding offtake agreement. The contract will start when production begins, initially for seven years with possible extensions. Pricing will be based on a market benchmark for manganese and current rates for magnesium.

Indiana Resources (ASX:IDA)
Indiana has reported strong results from initial tests at the Minos Project in South Australia, with high recovery rates for rare earth elements: 90.5% total TREE, 87.8% heavy REE, and 90.8% light REE. The tests, including flotation and leaching, confirm the project’s potential. Drilling has previously found high-grade intersections, and the target area is large and open for expansion. Further tests and follow-up drilling results are expected soon.

Sarytogan Graphite (ASX:SGA)
Sarytogan is beginning a 20-tonne trial mining project this week to collect ore for testing. The sample from the Central Graphite Zone will be processed locally in Kazakhstan and part of it sent to Australia for further testing and customer samples. CEO Sean Gregory said this step follows positive early results and is crucial for refining the project and gaining customer approval. The initial mining will use a small part of the resource, focusing on easily accessible, high-quality ore from the Central Graphite Zone.

At Stockhead we tell it like it is. While Indiana Resources is a Stockhead advertiser, it did not sponsor this article.