ASX finishes higher as Wall Street braces for key jobs report

Welcome to your five-minute recap of the trading day.

The numbers

The ASX gained on Friday despite a choppy Wall Street session overnight, as wary investors awaited monthly US non-farm payroll data to be released at the end of the week – the same report that sparked last month’s steep sell-off when it missed market expectations.

The S&P/ASX 200 closed 31 points higher, or 0.4 per cent, at 8013.4. Eight of the 11 industry sectors were in the green, with financial stocks (up 1.5 per cent) leading the charge as all big four banks edged higher.

Wall Street is bracing for a key employment report on Friday. Credit: AP

The lifters

Macquarie Group finished up 2.4 per cent after the company’s asset management division clinched the $24 billion sale of data centre operator AirTrunk to US company Blackstone and the Canada Pension Plan Investment Board on Wednesday.

It was followed by the Bendigo and Adelaide Bank, up 2.2 per cent, while CBA, the domestic bourse’s largest company, was up 1.5 per cent after hitting a record of more than $144 a share in afternoon trading. ANZ and Westpac gained 1.7 per cent, while NAB was up 1.4 per cent.

JB Hi-Fi led a rally by consumer discretionary stocks, closing up 1.8 per cent higher.

The laggards

Pilbara Minerals (down 6.6 per cent) was the biggest large-cap loser at the close, followed by Whitehaven Coal (down 5.6 per cent) and Mineral Resources, which lost 4.8 per cent.

The miners suffered as iron ore prices continued to slump. Australia’s biggest miner, BHP, was down 1.2 per cent, with rivals Rio Tinto and Fortescue also trending lower.

Energy stocks dropped 3 per cent as Brent Crude prices continued to slide below $US72.60 a barrel. Prices are on track for the sharpest weekly loss in almost a year amid concerns over demand from key consumers such as China.

Woodside dipped 3.9 per cent after it sold $US2 billion ($3 billion) of bonds in the US market overnight to help fund the purchase of a clean ammonia project in Texas. The fall follows a challenging week for the energy giant, marred by concerns its major Browse gas export project would threaten a newly endangered sea snake.

The lowdown

Novus Capital senior investment adviser Gary Glover said the financials continued to perform above expectations.

“The earnings growth is forecast to be flat over the next couple of years, yet they’re trading on some massive multiples that they’ve just never traded on,” he said.

Glover said the path the ASX 200 had taken over August into September mirrored the highs and lows of previous periods with high inflation, such as the 1940s and 1970s.

“In those high inflation markets of the past, the market might stand still over the longer haul, but the volatility is extreme throughout the period, so you get massive swings in the short term ... we’re seeing a bit of that here really.”

Overnight on Wall Street, the benchmark S&P 500 index and the Dow ended lower after a short-lived boost from a string of economic reports faded, while the Nasdaq finished slightly higher.

The S&P 500 lost 0.3 per cent, the Dow Jones slid by 0.5 per cent and the Nasdaq added 0.3 per cent.

Markets were edgy ahead of the release of the comprehensive non-farm payrolls data, which will likely set the stage for the Federal Reserve to begin cutting rates later this month.

Earlier in the session, Wall Street’s main indexes gained as reports helped allay concerns of labor market deterioration. The Institute for Supply Management survey showed services sector activity expanded in August while jobless claims declined last week, according to Labor Department data.

Eight out of 11 S&P 500 sectors lost ground, led by declines in healthcare and industrial stocks. The consumer discretionary sector led the gainers, driven partly by Tesla.

Tweet of the day

Quote of the day

“Most of us know the saying: slow and steady wins the race. Numbers released into the wild on Wednesday show the Australian economy is definitely a tortoise – but it should make the Reserve Bank pretty happy,” writes columnist Millie Muroi of the national accounts released by the Australian Bureau of Statistics this week.

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With Reuters

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