ASX 200 to fall, S&P 500 slips ahead of jobs data + 4 charts to watch

MARKETS

• S&P 500 lower, off session highs of 0.38%, snapped a four day winning streak
• Nasdaq up for a fifth straight session but off best levels
• S&P 500 and Nasdaq finish August down a respective 1.8% and 2.2%, marking their first monthly declines since February
• Relatively uneventful session ahead of US nonfarm payrolls, unemployment and ISM manufacturing data
• Recent bounce has been fuelled by a retreat in bond yields, disinflation momentum, a dovish lean from central banks, positioning dynamics with funds flipping back to the buy side, renewed AI hype and China stimulus
• Oil posts third monthly gain as OPEC+ announces further cuts (Bloomberg)
• Too early to make call on turning point for weak dollar, says SocGen (Bloomberg)

STOCKS & EARNINGS

• Cannabis stocks rallied after the US Department of Health and Human Services recommended easing restrictions on marijuana and classifying it as a lower-risk drug (CNBC)
• Salesforce lifts annual forecast, says software demand stays strong (Reuters)
• Okta forecasts quarterly revenue above expectations, shares surge (Reuters)
• CrowdStrike lifts annual profit forecast on resilient cybersecurity demand (Reuters)
• UBS signals most of Credit Suisse Investment bank to shut (Bloomberg)

CENTRAL BANKS

• Fed's Bostic says policy is appropriately restrictive (Bloomberg)
• Fed’s preferred inflation gauge rises modestly, spending jobs (Bloomberg)
• ECB's Schnabel sees worsened growth outlook as prices stick (Bloomberg)

CHINA

• PBOC vows to improve financing for private firms (Reuters)
• Chinese mega cities relax mortgage rules to shore up housing (Bloomberg)
• China's home sales drop for a third month as slowdown deepens (Bloomberg)
• China local governments speed up issuance of infrastructure bonds (Bloomberg)
• Property developer Country Garden posts $7bn loss in first half (FT)
• Country Garden delays yuan bondholder voting deadline again (Bloomberg)

ECONOMY

• US consumer spending accelerates, declining savings a red flag (Reuters)
• US core PCE inflation gauge gains in July, in-line with consensus (Bloomberg)
• Eurozone headline inflation comes in hotter and above 5.0% but core reading eases in line with expectations (Bloomberg)
• China factory activity shrinks for a fifth month but at a slower pace (Bloomberg)
• French inflation accelerates above expectations in August (Bloomberg)
• Japan industrial production contracts but retail sales beat (Bloomberg)
• South Korea flags longest stretch of factory output declines (Bloomberg)
• Australia Q2 business investment hits highest in almost 8 years (Reuters)

Charts of the Week

This week, Kerry Sun is in charge of Charts of the Week as regular Friday contributor Chris Conway is on holidays.

Bapcor (ASX: BAP) – Post earnings gap up

Bapcor's chart may serve as a case study for a technical set up known as the 'Buyable gap up'. Here are the key characteristics of this set ups, outlined by William O'Neil:

• A buyable gap up is a point at which the bulls have decisively won the argument over the bears
• The move should be significant
• You want to see volume of at least 150% of the 50-day average volume (the more volume, the more significant the gap)
• You can use the intraday low (of the gap up day) as the stop

Bapcor rallied 5.5% on the day of its FY23 results, with volume of almost 4 million (vs. 50-day average of ~740,000) and managed to hold the intraday low of the gap up day. So let's see if it can kick on from here.

Emerald Resources (ASX: EMR) – A gold leader

I refer to 'leader' in the context of share price performance. Gold has been a rather difficult sector two years and very few stocks have managed to trend higher. Emerald Resources is one of them, up 100% year-to-date. The company must be doing something that's fundamentally in the right direction.

From a technical perspective, the stock has been trending higher for most of the year. It's beginning to stall around the $2.30 level. Can it tighten up and push out from here?

Gentrack (ASX: GTK) – Consolidation

Gentrack experienced a 29% gap up on 22 May, the day of its half-year results. It's been trading mostly sideways for the past three months, in a relatively constructive manner (aka not giving back the gap up). The $4.10 area continues to be an area of resistance as the stock approaches this level, can it muster up a breakout?

Stanmore (ASX: SMR) – Moving out

The Morning Wrap was written today by Kerry Sun.