The Australian sharemarket is extending to fresh six-month lows this afternoon, tracking losses on Wall Street after stronger-than-expected jobs data heaped more interest rate worries on equity markets.
At midday, the S&P/ASX 200 is 42.6 points or 0.6 per cent, lower after tumbling below 7000 on Tuesday for the first time since March. The benchmark is now hovering around 6900.
Ten of the 11 sectors are lower, with utilities the only sector in the green, up 0.7 per cent.
Tech and communication stocks are the worst performing, both down 1.2 per cent, following losses from global tech giants like Apple, Amazon and Tesla overnight.
The S&P 500 fell 1.4 per cent to a four-month low, while the Nasdaq 100 index dropped 1.8 per cent. The Dow Jones dropped 1.3 per cent, wiping off the last of its year-to-date gains.
The latest US Job Openings and Labor Turnover Survey, or JOLTS, showed that the number of available positions rose to 9.61 million in August from less than 9 million in July. Economists polled by Reuters had forecast 8.8 million job openings in August.
Société Générale’s Albert Edwards, who’s been forecasting a market drop for some time, wrote in a note that the surge in bond yields had “echoes of the 1987 equity crash”.
“Never in my career have I witnessed such uncertainty about where we are in the economic cycle,” he said.
Meanwhile, the Australian dollar tumbled more than 1 per cent overnight, briefly falling below US63¢; the Bloomberg dollar spot index was 0.2 per cent higher.
Wall Street fear gauge jumps
Wall Street suffered another sell-off after strong US labour market data added to fears the Federal Reserve will have to continue to raise interest rates.
US bond yields leapt higher, with the 10-year briefly rising above 4.8 per cent and Wall Street’s fear gauge, the CBOE Volatility Index, or VIX, rose above 20 intraday, the highest such reading since May, closing the session up 12.3 per cent to 19.78.
Higher-for-longer interest rate worries are continuing to hit global markets
The S&P 500 fell 1.4 per cent to a four-month low, while the Nasdaq 100 index dropped 1.8 per cent. The Dow Jones dropped 1.3 per cent, wiping off the last of its year-to-date gains.
The latest US Job Openings and Labor Turnover Survey, or JOLTS, showed that the number of available positions rose to 9.61 million in August from less than 9 million in July. Economists polled by Reuters had forecast 8.8 million job openings in August.
Société Générale’s Albert Edwards, who’s been forecasting a market drop for some time, wrote in a note that the surge in bond yields had “echoes of the 1987 equity crash”.
“Never in my career have I witnessed such uncertainty about where we are in the economic cycle,” he said.
Stocks in focus
Intellectual property group IPH is among the best performers on the benchmark, up 2.4 per cent after analysts at Goldman Sachs upgraded the stock to a buy rating.
Shares in lithium takeover target Liontown Resources have edged up 1 per cent after a major stakeholder and Australia’s richest woman increased her holding in the company to 14.7 per cent.
After-pay owner Block Inc has dropped 2.6 per cent. Analysts at Citi have cut their price target for the tech stock to $65 form $90.
Mineral Resources has dipped 0.3 per cent after finalising a $US1.1 billion debt offer.
Embattled casino operator The Star Entertainment Group is holding steady after disclosing that JPMorgan and its affiliates had tipped over the 5 per cent substantial holding line.
TPG Telecom dipped 2.4 per cent. The company said discussions with Vocus Group were still ongoing over the latter’s $6.3 billion bid for the telco’s non-mobile fibre assets. This is despite Vocus’ exclusive due diligence period expiring.
