On a decidedly bleak day in geopolitical terms, the S&P/ASX200 was nevertheless up today, gaining 12.70 points or 0.18% to 6,966.90, paced up by a strong Energy sector (2.93%), the price of which was bolstered by strong US jobs data, the overnight tech rally on Wall Street, and, unfortunately, the violent recent and ongoing events in the Middle East.
The Aussie index has lost 0.90% for the last five days, but is virtually unchanged over the last year to date.
Energy notwithstanding, it was a slow day for most other sectors.
Sectors losing ground in the afternoon’s trade at time of writing were Consumer Staples (-0.42%), Real Estate (-0.45%) and Industrials (-0.41%).
Energy was followed into the green at a distance by Health Care (0.90%), Materials (0.28%) and Utilities (0.21%).
Strong US jobs data
Oil and gas stocks were high on the back of concern about conflict in the middle east, but not all of the movement on the markets was driven by this sentiment.
Healthy US jobs data gave investors a positive reason to snap up stocks, with the US economy adding more jobs than expected in September and the greenback and yields showing some resilience.
Forecasters had predicted that the US economy would add 170,000 jobs last month, and the unemployment rate would dip by 5.7%.
In fact: “The US economy added 336 thousand jobs in the month of September, 166 thousand more than expected. The unemployment rate, which was forecasted to drop to 3.7%, remained unchanged at 3.8% but average hourly earnings, a measure of wage growth, dropped to 4.2%,” said Capital.com senior market analyst Daniela Hathorn.
“The immediate reaction has seen the US dollar push higher, continuing the recent trend. The stronger jobs data consolidates the Fed’s position to keep monetary policy restrictive, and it puts greater weight on the likelihood of another rate hike before year-end.
“The fact is that it is very uncertain at this point what exactly is going to happen in the next six months. Not only is the jobs data showing resilience, but also industrial demand and household spending remains strong, which pushes back concerns about recession. But with yields on the 10-year treasuries expected to push the 5% line and with rates expected to remain elevated, the cost of capital continues to rise, which is likely to put a dampener on demand sooner or later.
“But for the meantime, markets seem to be positioned to continue pushing the US dollar higher and bonds lower – meaning yields have further room to rise. As this dynamic continues, stocks are likely to face further hurdles ahead, meaning that navigating the upcoming earnings season is going to be tricky. EUR/USD and GBP/USD have failed to sustain the reversal momentum they had been building over the past two sessions, with both pairs about to face key targets to test the appetite for continued selling.”
The five at five
Talon Energy and Strike Energy begin export of sales gas from Walyering from 1 October
Talon Energy Ltd (ASX:TPD) and partner Strike Energy Ltd commenced the stabilised export of commissioning gas from the Walyering gas field into the Parmelia Gas Pipeline under an arrangement with Santos WA Energy Ltd on October 1, selling a gross total of 52 terajoules (TJ) of gas.
Read more
Green Technology Metals advances towards becoming Ontario's first lithium producer
Green Technology Metals Ltd (ASX:GT1), aiming to be Ontario's first lithium concentrates and chemical producer, has provided an update on its integrated strategy for vertical supply chain development in Canada.
Read more
Melodiol Global Health welcomes third straight quarter of revenue growth for Canadian subsidiary
Mernova Medicinal Inc, the Canadian subsidiary of Melodiol Global Health Ltd (ASX:GLH), has achieved its third consecutive quarter of growth, delivering A$1.85 million in unaudited revenue for the three-month period ending on September 30, 2023.
Read more
Impact Minerals takes "tangible first step" in ESG adoption; shares up
Impact Minerals Ltd is trading higher on taking the first step in its ESG journey by disclosing ESG metrics, employing the World Economic Forum (WEF) Stakeholder Capitalism ESG framework. The markets have welcomed the news with shares trading as high as $0.013, up 8.33% from previous close.
Read more
Taiton Resources approved to drill significant molybdenum anomaly in potential “discovery moment”
Taiton Resources Ltd (ASX:T88) has received environment approval to drill a significant molybdenum anomaly in a second drilling program at the Highway Project’s Merino prospect in the Gawler Craton of South Australia.
Read more
On your six
Central banks intensify gold accumulation in August
Central banks around the world expanded their gold reserves for the third consecutive month in August, adding 77 tonnes to their global official reserves during the month — a 38% increase compared to July.
Read more
The one to watch
Race Oncology kicks off safety studies for RC220
Race Oncology Ltd (ASX:RAC) executive director Dr Pete Smith speaks with Proactive soon after announcing the company has initiated the toxicology and safety pharmacology studies required to support human clinical trials of its flagship bisantrene formulation for peripheral infusion, RC220.
Watch