ASX 200 to tumble, Nasdaq falls into correction on weak US jobs data

ASX 200 futures are trading 115 points lower, down -1.48% as of 8:30 am AEST.

S&P 500 SESSION CHART

OVERNIGHT MARKETS

• Major US benchmarks finished sharply lower, with the Russell 2000 posting its worst week since March 2023 and Nasdaq now more than 10% off record highs
• US weekly recap: Russell 2000 -6.6%, Nasdaq -3.3%, Dow -2.1%, S&P 500 -2.0%
• Market has flipped to “bad news is bad news” as growth worries (US unemployment rate hits three-year high, ISM manufacturing employment lowest since 2020, initial jobless claims highest in 11 months) outweigh the benefits of growing rate cut expectations (market currently pricing in more than 80 bps of easing this year)
• Soft US unemployment data has boosted expectations for Fed to cut 50 bps in September, with odds currently sitting at 70% from 12% a week ago
• US growth re-pricing triggers rush to exit from equities, spurring pivot toward haven assets of Treasuries and gold (Bloomberg)
• Swaps traders fully pricing in three 25 bp Fed cuts this year as 10-year yield falls below 4% to lowest since February (Bloomberg, FT)
• Investors weigh buying the dip vs worries about growing economic weakness (Reuters)
• Goldman says hedge funds lift short bets amid recent uncertainties (Reuters)
• Japan stocks slump to biggest two-day rout since 2011 with tech firms, banks drag on benchmark after BOJ hike (Bloomberg)
• Commodities slump as fund managers cut ~$41bn of bullish bets on natural resources on oversupply, softer China demand woes (FT)

STOCKS

• Apple (+0.7%) Q3 revenue and earnings beat consensus – iPhone, iPhone and Services reported better-than-expected sales, Q4 revenue and GM guidance slightly better, China remains soft, analysts bullish on multi-year replacement cycle for the iPhone on the back of Apple Intelligence demand (Bloomberg)
• Amazon (-8.8%) Q2 revenue a touch weaker-than-expected, operating income beat consensus by 7%, AWS growth accelerated to 19% from 17% in prior quarter, AWS will ramp capex spending in the 2H, Q3 guidance missed consensus (Bloomberg)
• Berkshire Hathaway discloses it sold ~49% of its stake in Apple during Q2 (CNBC)
• Berkshire Hathaway offloads more Bank of America shares, shedding more than US$3.8bn since mid-July (Reuters)
• Nike gets aggressive on Olympics marketing spend with global ad blitz to revive flagging sales (Bloomberg)
• Tesla China-made EV sales rose 15.3% from a year earlier in July (Reuters)
• Maersk lifts guidance on continued shipping disruptions in the Red Sea, forecasts higher profits for third time since May (FT)

CENTRAL BANKS

• Majority of economists expect another BOJ rate hike by year-end (Bloomberg)
• Three of world's biggest central banks diverge on policy amid growing influence of domestic macro factors (Bloomberg)
• RBA widely expected to leave rates on hold next Tuesday, economists see rate cuts from first quarter of 2025 (Reuters)

POLITICS & GEOPOLITICS

• Trump floats end to taxes on social security benefits that would help higher-income retirees, hasten automatic benefit cuts (WSJ)
• Iran reiterates "harsh punishment" to Israel after Haniyeh assassination (NBC News)
• US preparing for "every possibility" regarding Iran retaliation (ABC News)
• Biden and Netanyahu discuss new military strategy to fight off Iranian threat (Axios)
• US recognizes opposition candidate González Urrutia as the rightful winner of Venezuela's presidential elections (Axios)

ECONOMY

• US unemployment rate jumps to a three-year high of 4.3% in July vs. 4.1% consensus, nonfarm payrolls rose 114,000 vs. 175,000 consensus (Reuters)
• South Korean inflation reaccelerates, clouding rate cut expectations (Bloomberg)
  
  

ASX TODAY

• Calidus Resources's receivers and managers seek urgent expressions of interest for acquisition ad recapitalisation (CAI)
• Hospitals seek right to boycott big insurers, including Medibank, Bupa, NIB, HCF and HBF Health from funding talks (AFR)
• Rex’s PE lender PAG believed to be holding off on a move to appoint a receiver as administrator EY starts preparing documents for a sale of the regional airline (The Aus)
• Vocus back in talks to buy TPG Telecom's fibre network (AFR)

WHAT TO WATCH TODAY

• ETF watchlist – Pain, pain everywhere: Our overnight ETF watchlist was mostly red, with sub-sectors like Uranium (-6.2%), Semis (-5.3%) and Airlines (-4.2%) leading to the downside
• Extended weakness: S&P 500 futures are currently down -0.82% and Nasdaq futures are -1.30% as markets extend selloff from last week
• Diggers & Dealers 5-7 Aug: Companies presenting today include AIS, ARL, BGL, DLI, DYL, EMR, FEX, GLN, IGO, LYC, MAU, NST, PNR, RRL, WA1, WAF, WC8

BROKER MOVES

• Cleanaway upgraded to Buy; target increased to $3.30 from $2.80 (UBS)
• Lifestyle Communities downgraded to Overweight from Buy; target cut to $11.70 from $15 (Jarden)
  
  

KEY EVENTS

• Mon 5 Aug: PRL Global (PRG) – $0.05, Perpetual Credit Income Trust (PCI) – $0.007
• Tue 6 Aug: BKI Investment Company (BKI) – $0.04, Amcil (AMH) – $0.03
• Wed 7 Aug: Mayfield Group (MYG) – $0.02, Pacific Smiles (PSQ) – $0.07
• Thu 8 Aug: None
• Fri 9 Aug: Djerriwarrh Investments (DJW) – $0.08, Aloca (AAI) – $0.107

• Dividends paid: None
• Listing: None
• AGMs: None

No major economic announcements. 

This Morning Wrap was written by Kerry Sun.