Live updates: Wall Street tumbles on weak jobs report and ASX slips

Can’t make it to the annual Diggers and Dealers conference in Kalgoorlie?  …  don’t worry, The Business has booked a spot with reporter Clint Jasper and a production team over there for series of yarns.

The program’s first interview out of the conference will be with Paladin energy COO and soon to be CEO Paul Hemburrow, who’ll talk to Kirsten Aiken about the future of uranium mining in Australia.

We’ll also check out the tepid start to the week on markets still digesting Wall Street’s tumble where investors were hit with a double whammy of tariffs and weak US jobs data, followed by the sacking of the head of the US Bureau of Labor Statistics.

That’s The Business on ABC News 8:45pm AEST, after the Late News on ABC-TV or anytime on ABC iView.

Hi,

Me again.

Just wanted to draw your attention to the Australian 2 Year Bond yield.

It trades offshore, as opposed to the 3 Year yield, which only trades locally. It fell sharply over the weekend.

It’s now down 0.091 as at 2pm AEST, at 3.299 per cent.

It’s implying, traders tell us, several more RBA interest rate cuts and a global economic slowdown.

Once again, the money markets and equity markets are singing to different song sheets.

Fitch Ratings in New York has updated its estimates of how high tariffs will be in the US after Donald Trump’s updated executive orders late last week.

Considering the latest tariff rates, and weighting them by the volume of imports that comes into the US from each country, Fitch says the across-the-board effective tariff rate will now be 17%.

That’s around 3 percentage points higher than estimates from late June, but 8 percentage points lower than the level on April 3, after the Liberation Day tariffs were announced.

Capital Economists deputy chief North America economist Stephen Brown said on Friday that there wasn’t a massive difference with what the market had been expecting.

“That 17% rate would be the highest effective tariff rate since the 1930s, but only a few percentage points higher than we assumed in our latest quarterly forecasting round in June,” he wrote.

But things could still change, down or up.

“Tariffs on China remain at 34%. Under the Aug. 1 tariff regime, China has the highest ETR of the US’s major trading partners,” Fitch noted.

The final outcome on where US tariffs on Chinese imports will end up is still uncertain, and will have a significant impact on the final effective tariff rate.

Stephen Brown also noted that some other key trade deals (such as Mexico) are yet to be finalised, and that the whole Trump tariff regime still faces a court challenge that could strike them down.

“Is hope triumphing over experience?” That’s the question posed by J.P. Morgan’s Australian equities team at the start of the August (mainly full year) reporting season.

The J.P. Morgan team, led by strategist Jason Steed, says “the stage is set for earnings reckoning.”

Mr Steed points to the market’s current lofty (near record) valuations and whether they can withstand another season of soft delivery, given the extreme volatility seen in reaction to results across the February results season 6 months ago.

On Mr Steed’s analysis, it could be a tough time for investors coming up.

“With multiples stretched and earnings trends persistently weak, the balance of risk is to the downside,” he said.

“Our team’s forecasts are pointing to more misses than beats (16% vs. 13%), suggesting expectations are too elevated in pockets of the market.”

February was notable for the outsized, and often unpredictable share price movements sparked by the results on any given day.

“February’s results season was marked by sharp dislocations: extreme volatility, questionable fundamentals, and share price movements that often defied earnings quality,” Mr Steed said.

“Financials and healthcare endured their worst single-day reactions on record, while small caps and REITS rallied despite tepid revisions.”

The J.P. Morgan team points out, since February its earnings projections have continued to slide (-5.2%) while stock prices have marched higher (+6.0%).

“While there are corners of the market where we expect strong earnings delivery — Communications, Healthcare and Tech, the uplift is more than offset by tepid growth emanating from Financials, Energy and Materials,” Mr Steed said.

Over at Morgan Stanley, the message from its equities strategy team is similar.

“Australian earnings are already subdued, having fallen some 18.3% from the peak when looking at aggregate consensus FY25 estimates, where consensus growth is now negative 1.7% and outer-year growth rates are anchored around 5-8%,” Morgan Stanley’s Chris Nichol wrote in a note to clients this morning.

Mr Nichol says while investors expect that conditions domestically are on the improve, there is not much upside on the broad ASX 200 index for now.

If you were out and about at 7pm last night, you may well have missed Alan Kohler piece on carbon emissions.

OK, so we’re halfway through the Kyoto process and emissions are still rising and “net zero” seems a forlorn hope, but Alan argues there is plenty governments can do to prepare for surviving in a more savage climate.

Well worth 2 mins and 1 second of your time.

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The ASX 200 is marginally lower, despite a sharp fall in global markets on Friday and futures markets pointing to weaker trading this morning.

At 1pm AEST the index was down 0.2% to 8,645 points.

A fall in the industrial and finance sectors was cushioned somewhat by buying in non-cyclical retailers and the miners in general, and gold miners in particular.

The supermarkets Coles and Woolworths have gained around 1.6%.

The big miners BHP (+0.4%), Rio Tinto (+0.2) and Fortescue (+1%) have benefited from higher iron ore prices on Friday as the commodity popped back above $US100/tonne in China.

The banks and financial stocks are pulling in the other direction, with CBA and Macquarie down 0.8% and 1.1% respectively.

Judo Capital is down 2.7%.

The big movers on the ASX 200 reads like a roll call of the index’s major gold miners, although Beach Energy (+4.6%) is also doing well after posting full year results and announcing a higher dividend this morning.

Endeavour Group has gained 3.7% despite (or maybe because of) another management upheaval and a none-too-exciting earnings update.

The bottom movers feature the local listing of the big US aluminium player Alcoa (-4.2%) and payment platforms Block Inc and Zip CO.

There’s been a mixed response on Asian markets to Wall Street’s Friday swoon.

At 12:00pm AEST here’s how thing stood:

Australia’s ASX 200: -0.3%Japan’s Nikkei: -1.9%China’s Shanghai Composite: +0.2%Hong Kong’s Hang Seng: +0.1%South Korea’s Kospi: +0.7

And looking ahead to this evening, S&P 500 futures in the US seem to have regained some composure and are currently up 0.3%.

Hi,

DT jumping into the blog for a sec.

It was a little shocking waking up on Saturday morning to huge revisions in the US labour market statistics and US President Donald Trump firing the statistics boss for the disappointing economic data — which he claims were just ‘wrong’.

Today markets seem relatively tame.

Marcus Today Senior Analyst Henry Jennings has a few ideas as to why:

“Our market has responded in a very light fashion.”

“I guess we’re looking at it now as kind of a one-off sort of step change down, a little bit of a realignment of risk.

“And we’re not really being that much affected by it.

“So at the moment it’s seen as a kind of a one off or readjustment or realignment — some of the froth being blown off and it is obviously a concern. the US is slowing, but that will bring [interest] rate cuts.”

It’s worth noting that several analysts have told the ABC another disappointing economic data set — essentially confirming what markets are trying to look past in Friday’s jobs data — could see much big sharemarket falls.

Upheaval at alcohol retailer Endeavour Group continues with the departure of executive chairman Ari Mervis and the appointment of another interim boss.

Mr Mervis left citing disagreements with the board.

Lead independent non-executive director Duncan Makeig will step in as interim chair and will appoint a new external independent chair.

Chief financial officer Kate Beattie will assume the interim CEO role until the new CEO Jayne Hrdlicka arrives in January 2026.

While yet another upheaval is taking place ahead of the important pre-Christmas trading period, the market appears to have welcomed the move, with Endeavour shares up almost 4% this morning.

The company also issued a full-year trading update with net profit guidance of between $420 million to $425 million.

Endeavour houses brands such a Dan Murphy and BWS in its retail footprint of more than 1,700 outlets and pubs.

RBC analyst Michael Toner said the guidance is slightly below expectations with some one-off costs playing a part.

Mr Toner noted, given the executive transition period leading to a new CEO, he expected “a period of ongoing disruption and turnover within the company over the coming 12 months”.

JP Morgan retail analyst Bryan Raymond agrees that earnings are at risk due to the destabilised management team.

“The departure of Ari Mervis is a distraction, as it has a knock-on effect to a number of other roles within the business,” Mr Raymond wrote in a note to clients.

“While Jayne Hrdlicka is consulting two days a week, the Endeavour management team will be stretched heading into Endeavour’s key trading period in 2Q26, as this also follows BWS MD Scott Davidson stepping down at the end of November.

“A period of strategic stability and earnings delivery is required before investors can begin to build confidence in the outlook for the business.”

The ASX 200 has opened marginally lower, despite a sharp fall in global markets on Friday and futures markets pointing to weaker trading this morning.

At 10:40am AEST the index was down 0.1% to 8,658 points.

A fall in the industrial and energy sectors was cushioned by buying in non-cyclical retailers and the miners in general, and gold miners in particular.

The supermarkets Coles and Woolworths opened around 2% higher.

The big miners BHP (+0.2%) and Fortescue (+0.7%) benefited from higher iron ore prices on Friday as the commodity popped back above $US100/tonne in China, while Rio Tinto is relatively flat.

The banks and financial stocks are pulling in the other direction, with CBA and Macquarie down 0.5% and 0.9% respectively.

The big movers on the ASX 200 reads like a roll call of the index’s major gold miners, although Beach Energy (+4%) is also doing well after posting full year results and announcing a higher dividend this morning.

The bottom movers feature the local listing of the big US aluminium player Alcoa (-4.6%) and payment platforms Block Inc and Zip CO

The ASX 200 has opened 0.2% lower at 8,642 points (10:15am AEST).

Big logistics software developer WiseTech Global has announced it has completed its $3.3 billion takeover of the US-listed e2open.

WiseTech describes e2open as a “leading provider of cloud-based trade and supply chain solutions to the world’s largest companies”.

The takeover is fully debt funded.

Newly installed WiseTech CEO Zubin Appoo said the acquisition added to the company’s global operations, with very little product overlap.

The deal sees WiseTech expand its focus from logistics service providers to take in demand planning, channel, supply transportation and logistics for global importers, exporters, manufacturers and shippers.

“This is a significant step in achieving our extended vision,” Mr Appoo said.

Domestically focused gas producer Beach Energy has posted a full-year $44 million loss.

The result was dragged down by a non-cash impairment charge of $474 million, mainly due to lower near-term commodity prices.

However, underlying net profit rose 32% to $451 million on a 13% increase in sales revenue to $2 billion.

The average realised price of its gas was also up 13% over the year.

Production rose 9% from higher east coast gas demand.

Beach announced a fully franked final dividend of 6 cents per share, up 200% on last year’s final dividend.

While the July US jobs data was weak — a 73,000 rise in non-farm payrolls — it was the savage downward revision of previous months jobs’ growth did all the damage to markets.

May job gains revised from 144,000 to 19,000 and June from 147,000 to 14,000.

“So, in total, non-farm payrolls in July were 290,000 below where the market thought they would be and show a 3-month moving average of just 35,000,” NAB’s head of FX research, Ray Attrill, points out.

Where the market saw this as a sign of a significant economic slowdown, at a time inflation appears to be on the march (stagflation anyone?), the Trump administration saw the numbers as an act of treachery, designed to undermine its economic narrative and credentials.

Mr Trump said the figures were “rigged” by the Biden-appointed head of the Bureau of Labor Statistics (BLS), Erika McEntarfer.

Providing no evidence of data manipulation, Mr Trump sacked Ms McEntarfer on the spot, fulminating in a social media post that “important numbers like this must be fair and accurate, they can’t be manipulated for political purposes” adding that, in fact, “the economy is BOOMING under TRUMP”.

So, what are these contentious non-farm payroll numbers, and why the big revisions?

The BLS surveys 121,000 employers — businesses and government agencies — each month, seeking their total payroll employment during the week in which the 12th day of the month falls.

Reuters says the response rate has fallen sharply over the last several years since the COVID pandemic, from 80.3% in October 2020 to about 67.1% in July.

Knowing that, BLS allows late-arriving employer submissions, and revisions to earlier submissions, to be considered over the next two months.

“Downward revisions have become a consistent pattern in recent years, and as with other statistics, tardier participation in the Establishment survey (but which we are told eventually reaches 90-95%) looks to be responsible for this pattern, the notion being that late filers are those suffering more business stress than others,” Mr Attrill says.

“Chances are then, that July will also be revised lower in September and/or October.”

Steelmaker BlueScope is leading an international consortium bidding for the Whyalla Steelworks.

In a statement to the ASX, BlueScope said it’s reached an agreement with Japan’s Nippon Steel, India’s JSW Steel and South Korea’s POSCO.

“The consortium has identified Whyalla as a prospective location for future production of lower emissions iron in Australia for both domestic and export markets, with the potential to play an important role in decarbonsiation of the global steelmaking industry,” the company said.

The consortium has submitted an expression of interest outlining possible options for Whyalla’s assets, hoping for an invitation to participate in the next part of the sales process.

Global oil prices will come under renewed pressure this morning after the oil cartel OPEC and its allies agreed to raise production to recapture a greater market share.

The global benchmark Brent crude fell 2.8% to below $US69/barrel on Friday in anticipation of an announcement.

The decision this morning by eight of the largest oil producing nations to increase output by 547,000 barrels/day (bpd) effectively marks a full, and earlier-than-expected reversal of OPEC’s largest tranche of production cuts.

The announcement doesn’t include a separate 2.5 million bpd production increase from the UAE.

Speculation now shifts to OPEC’s September meeting, where another tranche of 1.6 million bpd cuts are expected to start being unwound.

The August reporting season cranks up another gear this week with the likes of REA and QBE, as well as a number of real estate investment trusts, releasing results.

Mon: Argo Investments (FY)

Tue: Credit Corp (FY)

Wed: BWP Trust (FY), REA Group (FY), Pinnacle Investment Management (FY)

Thu: AMP (HY)

Fri: Block Inc (HY), Centuria Industrial REIT (FY), QBE (HY), Avita Medial (HY), Nick Scali (FY)

Third quarter results in the US this week include BP, McDonald’s, Uber and Sony

Australia:

Mon: Inflation gauge (Jul)

Tue: Household spending indicator (Jun), Job ads (Jul)

Thu: International trade (Jun)

International:

Mon: US — Factory orders (Jun)

Tue: US — International trade (Jun), Services PMIs (Jul)

Thu: CN — International trade (Jul)

            US — Consumer expectations ((Jul)

            UK — BoE rates decision

Sat: CN — Inflation (Jul)

It’s a quieter week on the macro front coming up.

The ABS Household Spending Indicator (Tuesday) and Australia’s international trade balance are the key figures this week.

Spending, while being a tad soft this year, picked up in May and that trend is expected to flow through to the June numbers.

The ABS also trots out June’s trade figures on Thursday.

The trade surplus shrank to $2.2 billion in May, largely due to an increase in imports and a slight decline in non-rural exports.

While commodity prices were generally softer in June, fewer imports mean the surplus is likely expand beyond $3 billion again.

Offshore, there will be interest in the international trade figures from tariff combatants the US (Tuesday) and China (Thursday).

The US is likely to report an overall trade deficit.

However, it is expected to narrow from the $US72 billion in May to about $US60 billion in June as the reversal of the initial import surge from firms front-loading ahead of tariffs rolls on.

The Chinese data is expected to show a still sizeable trade surplus of more than $US100 billion in June, but a slowing in export growth and decelerating imports.

Perhaps of more interest will be China’s inflation — both consumer and producer — data out on Saturday.

Both the CPI and PPI are forecast to show deflation has set in, much to the frustration of the central planners.

On Thursday, the Bank of England is likely to cut rates by 25bp as underlying economic growth softens, and wage growth slows.