Pre-Market Report – Monday 5th August - US Markets Fall Hard - SPI Down 115 - Risks Grow - NFP Stokes Recession Fears

Market Updates

The sell-off on Wall Street continued for a second consecutive session overnight. Weak jobs data fuelled worries that the Fed's decision to hold rates at two-decade highs is risking a hard landing/recession. Market fears have triggered a surge in volatility seeing the VIX jump to 23.39 (+25.8%), its highest since March 2023. The S&P 500 recorded its worst reaction to jobs data in almost two years, falling 1.84%. The NASDAQ plummeted 2.43% and confirmed it was in correction territory. The Dow traded lower all session, losing 611 points (-1.51%). Down 989 points at worst. The Russell 2000 slumped 3.52%, falling to a three-week low and saw its largest two-day fall since June 2022. Non-farm payrolls rose by 114k in July, significantly below expectations of 175k, marking one of the weakest prints since the pandemic. US Unemployment rate unexpectedly rose for a fourth month to 4.3%, a near three-year high. Treasury yields took a nosedive overnight after jobs numbers showed the US created fewer jobs than expected, supporting bets for more aggressive rate cuts by the Fed this year. 10Y yield dropped 18.8bps and the 2Y yield fell 28.5bps. USD Index fell to a four-month low, down 1.14%. Bets for a 50bps cut by the fed at a September meeting have jumped to 69%, according to CME FedWatch.
ASX set to tumble another 115 points (-1.46%) according to SPI futures.
COMMODITIES

• Exxon delivers $9.2bn Q2 profit, raises output target.
• Chevron earnings slide, Hess merger arbitration drags on.
• Chilean court rejects Tianqi's request to pause SQM-Codelco deal.
• Copper firms on potential US rate cuts after jobs data.
• Oil settles at 8-month low after disappointing US job numbers.
• OPEC oil output rises in July on Saudi rebound, survey finds
• Gold retreats on profit-taking and logs weekly gain.

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