The Australian stock market is expected to rise this morning, following a modest rebound on Wall St.
Oil prices jumped amid output disruptions in the Gulf of Mexico, but iron ore slumped.
Inflation is becoming more and more of a concern.
Asian markets fell as a slowdown in US consumer inflation couldn’t overcome COVID concerns. Europe’s markets also fell, as data from London showed annual inflation spiked to a nine-year peak of 3.2% in August. Meanwhile, US inflation slowed to 5.3% in August from a 13-year high.
Also of note, was the Hong Kong market being dragged after Macau unveiled its plan to crackdown on casinos, causing casino business to collapse.
Here’s what we saw:
- Brent crude climbed 2.5% to $US75.46 a barrel.
- Iron ore tumbled 5.8% to $US113.40 a tonne.
- Gold futures fell 0.7% to $US1794.80 an ounce.
- Spot gold was trading near US$1,793 an ounce at the US close.
- Copper rose 1.9%.
- Aluminium lifted 2.2% after further cuts to production in China.
- Tin was up by 2.4%.
- Lead fell by 1.6%.
Australian markets
Jobs data will be released today and the numbers aren’t expected to be pretty.
Lockdowns have had a major impact on the Australian economy and while falls in the market have been modest, signs don’t look good for the immediate future.
In Sydney payroll jobs have fallen 8.9% since lockdowns began and economists believe the negative momentum is accelerating.
"Sydney is being hit at least as hard, if not harder, this time than it was in early 2020," said Westpac economist Justin Smirk.
"Sydney payrolls contracted 4.9% in the last two weeks to be down 8.9% since the start of the lockdown. In early 2020, the peak to trough in Sydney payrolls was -8%.
"It does appear that the negative momentum in Sydney is accelerating," he said.
And there is no doubt that Victoria is in the firing line as well.
The full extent of the negative momentum will be revealed later today.
Australia goes nuclear … with submarines
On a note that could be good for the market, Prime Minister Scott Morrison announced today that Australia will build nuclear-powered submarines in a new partnership with the United States and Britain.
The partnership is part of a new trilateral alliance between the countries known as AUKUS and is in response to “complex” relationships within the Indo-Pacific region.
“The future of the Indo-Pacific will impact all our futures,” Mr Morrison said on Thursday alongside US President Joe Biden and UK Prime Minister Scott Morrison, who appeared via video link.
“To meet these challenges, to help deliver the security and stability our region needs, we must now take our partnership to a new level.”
The first initiative is to build a nuclear-powered submarine fleet for Australia.
“But let me be clear — Australia is not seeking to establish nuclear weapons or establish a civil nuclear capability,” Mr Morrison said.
Australia has rich deposits of uranium and Australia has several ASX companies in the uranium game.
Could this be the move that kickstarts a rise in value for uranium stocks?
Australian indices
- ASX 200 fell 0.27% to 7,417.00
- ASX24 futures rose 0.4% to 7,447
- S&P/ASX Small Ordinaries rose 0.16% to 3,539.00
- All Ordinaries fell 0.22% to 7,723.20
US markets
It was a solid day on Wall St, with stocks finishing higher and shrugging off several lacklustre sessions.
“The market got a bit oversold in the near term,” said Tom Cahill of Ventura Wealth Management.
Cahill said there was underlying confidence in an economic rebound despite the growing number of COVID infections that has weighed on sentiment.
He said gains made by companies like metals producer Freeport McMoran and General Motors, present as “a vote of confidence in the global economy”.
A surge in crude oil prices boosted energy shares with EOG Resources up 8.3% and Diamondback Energy up 7.8%.
Microsoft shares gained 1.7% after announcing a dividend increase and a large US$60 billion share repurchase program.
However, Wynn Resorts (NASDAQ:WYNN) shares slid 6.3% as the Macau Government looks to increase regulatory scrutiny over casinos.
US indices
- Dow Jones rose 0.7% to 34,814.39
- S&P 500 rose 0.9% to 4,480.70
- Nasdaq rose 0.8% to 15,161.53
European markets
European markets fell on Wednesday, with Utilities stocks tumbling 2.9% and Europe's biggest utility Enel falling 5.5% after the Spanish Government's move to cap energy bills.
In London trade, shares in Rio Tinto rose by 0.8% and shares in BHP lifted by 0.5%.
European indices
- STOXX 600 fell 0.80% to 463.91
- German Dax fell 0.7% to 15,616.00
- UK FTSE fell 0.3% to 7,016.49