The ASX usually takes its direction from larger overseas share markets.
Overnight, US markets didn’t perform very well — the Dow Jones was practically flat, while the S&P 500 and Nasdaq Composite fell by 0.2% and 0.3% respectively.
Wall Street’s finished mostly lower after the US Labor Department released data showing the jobs market has weakened considerably.
But analysts say the job figures weren’t so bad that it would lead to the US Federal Reserve announcing a super-sized interest rate cut later this month.
The Fed has strongly hinted it will cut rates at the conclusion of its meeting on September 17-18.
While a 0.25 percentage point rate cut will almost certainly happen (according to market pricing), there’s a small chance the Fed may also consider a 0.5 percentage point cut.
Now here are the details of those job figures I mentioned.
Demand for workers in America have fallen to their lowest level in 3.5 years, so it has become much harder to find work.
US job vacancies have fallen to a 3.5 year low(LSEG Datastream, Reuters)
Job openings fell by 237,000 to 7.673 million on the last day of July (the lowest level since January 2021).
That’s according to the US Labor Department’s JOLTS report (which stands for Job Openings and Labor Turnover Survey).
The July result was worse than expected. Economists polled by Reuters had forecast 8.1 million job openings — while hires increased by 273,000 (to 5.52 million), and layoffs rose 202,000 (to a still-low 1.76 million).
Data for the previous month (June) was revised lower to show 7.91 million unfilled positions (instead of the previously reported 8.18 million).
Businesses using AI without telling customers or employees
A third of businesses using artificial intelligence are not informing their employees or customers that they are doing so, a survey of business leaders using AI has revealed.
A comprehensive survey of Australian chief executives, chief technology officers and other leaders of companies using AI found most had immature or “developing” approaches to using AI responsibly.
Those business leaders said their companies were using AI in a wide variety of ways, including providing 24/7 customer service, recommending additional products and altering prices for customers based on previous interactions.
But half had not carried out human rights or risk assessments on their uses of AI, and said they had no plans to do so.
For more, here’s the latest story by Jake Evans:
ASX tumbles and Australia’s weak economic performance: Alan Kohler’s finance report
In case you missed it, Alan Kohler provided a handy summary of yesterday’s market sell-off on the 7pm News.
He also included some interesting charts which show how poorly Australia’s economy is performing:
Jim Chalmers had no way to sugar-coat the economy’s GDP figure but there was also good news for the government
There was no way of sugar-coating the latest dismal figure on the economy: Growth was barely positive.
Apart from the pandemic years, it hasn’t been this weak since Australia was emerging from recession in 1991.
Back then, Jim Chalmers was barely out of primary school and Oasis was getting together for the first time.
But the treasurer wants everyone to know the June quarter GDP result could have been much worse.
Without government spending, the Australian economy would be contracting, and unemployment would be rising faster.
Here’s the latest analysis from David Speers:
Blackstone buys data centre company AirTrunk for $23.5 billion
Australian data centre company AirTrunk has just been sold for $23.5 billion to private equity giant Blackstone.
It’s a landmark deal that Wilson Asset Management analyst Sam Koch says will have ramifications for the data centre industry in Australia, and globally.
He says the success of the business shows Australia can punch above its weight in the sector.
You can listen to his interview with The Business host Kirsten Aiken here:
Consumer recession worsens, as living standards fall for 18 months
Australia’s economy barely grew in the June quarter and expanded just 1% over the last year, according to the ABS.
Excluding the COVID pandemic period, that’s the weakest annual growth since the 1990s recession.
Individually, Australians continue to go backwards in what’s known as per capita recession. Living standards have now been falling for 18 months.
Treasurer Jim Chalmers has previously warned the Reserve Bank’s 13 interest rate rises are “smashing the economy”.
Although RBA governor Michele Bullock recently said an interest rate cut is unlikely to happen in the next six months, markets are betting the bank will begin its rate-cutting cycle as soon as February 2025.
Here’s my summary of how Australia’s economy is tracking:
As the gambling advertising ban debate heats up, a new report calls for maximum loss limits for pokies and online betting
Australia has the highest gambling losses in the world, according to a new Grattan Institute report that calls on federal and state governments to stand up to “vested interests”, and implement a complete ban on gambling ads and limits on how much people can bet when at the pokies and via online betting platforms.
The report, A Better Bet: How Australia Should Prevent Gambling Harm, says Australia has the highest gambling losses in the world because governments have taken “a lax approach to regulating gambling” and “let the gambling industry run wild”.
It notes past reform pushes have failed “because of well-funded, coordinated attacks by vested interests,” and that has led to big losses.
Our average annual losses per adult ($1,635) far exceed the average in similar countries such as the US ($809) and New Zealand ($584), according to the Grattan Institute.
For more, here’s the story by Nassim Khadem:
Market snapshot
ASX futures: flat at 7,939 points
ASX 200 (Wednesday close): -1.9% to 7,951 points
Australian dollar: +0.2% at 67.2 US cents
Wall Street: Dow Jones (+0.1%), S&P 500 (-0.2%), Nasdaq (-0.3%)
ASX to open steady, S&P 500 and Nasdaq finish lower again
Good morning! I’ll be here to guide you through the latest finance and economic news.
As you may recall, the Australian share market suffered heavy losses yesterday (that 1.9% drop was its worst performance since the sell-off in early August).
This morning, ASX futures are trading flat, so it looks like the market is headed for a cautious opening in a few hours.
Wall Street didn’t perform so well overnight, so it won’t be providing an inspiring lead for our share market.
The Dow Jones rose 0.1% (practically flat), while the S&P 500 fell 0.2%, and the Nasdaq Composite lost 0.3% — and this comes after significant losses for US tech stocks the day before.
In local economic news, Reserve Bank governor Michele Bullock will speak at the Anika Foundation in Sydney, at 1:05pm AEST.
The topic of Ms Bullock’s speech is a highly relevant one: The Costs of High Inflation.
We’ll let you know what the governor says as soon she starts speaking!
