2 August Markets at a glance

Around the grounds

Australian investors have hit the sell button in today’s trade, with the S&P/ASX200 sliding over 2% after scaling record highs in the last two straight session. It comes amid a global sell-off with losses across the board on weaker-than-expected US manufacturing data.

Looking at the sectors, miners are leading the losses with the index down over 2%, despite iron ore futures rising to touch a one-week high. Energy is down after oil prices slipped after global supply seemed largely unaffected by rising geopolitical tensions in the Middle East.

Rate sensitive sectors real estate and financials are also lower with the “Big Four” banks falling between 1.9% and 3%.

Elsewhere, looking at the path of policy for the Reserve Bank of Australia (RBA), the latest Reuters poll shows no moves in the benchmark are expected until at least the first quarter of next year, as price pressures remain elevated.

All but one of the 33 economists polled expect the central bank to leave rates unchanged at its upcoming August meeting. In a survey taken before the June meeting, more than 60% of those economists had tipped at least one cut to the cash rate before the end of 2024.

Among the majors, ANZ (ANZ) and NAB (NAB) see no change this year, while Westpac (WBC) and CBA (CBA) remain the outliers, calling for one cut before the end of the year.

Going global

Let’s get to the global stage, and the pressure is being felt across the region with Asian shares and U.S. Treasury yields taking a nosedive after data showed US manufacturing activity fell into contractionary territory and hit an 8-month low, sparking fears of a worsening economic outlook state side.

MSCI’s broadest index of Asia-Pacific shares outside of Japan are lower, tracking steep losses on Wall Street.  Tokyo’s Nikkei 225 is the biggest loser in the region, tumbling 5% to sit below the 37,000 level for the first time since April. Japan’s TOPIX banking index is bearing the brunt, at one stage down over 6% in the Asian session.

The retreat puts the index on track for an over 3.5% slide this week, largely due to a sharp rise in the Japanese yen after the Bank of Japan (BoJ) raised interest rates on Wednesday and unveiled a detailed plan to slow its massive bond buying programme.

No surprise here, US futures are back online, with a negative open expected on Wall Street.

Digging deeper into the day’s currency plays, the yen is hovering just above a four-month high, and is eyeing a 3% weekly gain, while the Swiss Franc is getting a leg up from the risk-off mood hitting its strongest level since early February. Elsewhere, sterling is lower after the Bank of England (BoE) cut interest rates from a 16-year high overnight, while the risk sensitive Kiwi dollar is a touch lower, the Australian unit has recovered some ground and is higher at the 65 US cent mark.  

In the news

Finally, a few stocks to watch in today’s trade. Australian listed shares of Macquarie Group (MQG) are under pressure, as the investment firm considers a new capital notes offer, while the lender says the offer is considered as part of its regular capital and funding strategy, and subject to market conditions, there is no guarantee it will proceed.

The stock is up around 15% this year, as of last close.

Rounding things out around the wires, workers at BHP's (BHP) Escondida mine have rejected an offer for a new collective bargaining agreement, setting the stage for potential strike action.

And looking ahead, Australian investors are gearing up for reporting season with heavy hitters James Hardie (JHX), CBA (CBA), AMP Ltd (AMP) and Transurban (TCL) all out with numbers next week.

All prices and analysis at 2 August 2024.  The content is distributed by WealthHub Securities Limited (WSL) (ABN 83 089 718 249)(AFSL No. 230704). WSL is a Market Participant under the ASIC Market Integrity Rules and a wholly owned subsidiary of National Australia Bank Limited (ABN 12 004 044 937)(AFSL No. 230686) (NAB). NAB doesn’t guarantee its subsidiaries’ obligations or performance, or the products or services its subsidiaries offer.  This material is intended to provide general advice only. It has been prepared without having regard to or taking into account any particular investor’s objectives, financial situation and/or needs. All investors should therefore consider the appropriateness of the advice, in light of their own objectives, financial situation and/or needs, before acting on the advice.  Past performance is not a reliable indicator of future performance.  Any comments, suggestions or views presented do not reflect the views of WSL and/or NAB.  Subject to any terms implied by law and which cannot be excluded, neither WSL nor NAB shall be liable for any errors, omissions, defects or misrepresentations in the information or general advice including any third party sourced data (including by reasons of negligence, negligent misstatement or otherwise) or for any loss or damage (whether direct or indirect) suffered by persons who use or rely on the general advice or information. If any law prohibits the exclusion of such liability, WSL and NAB limit its liability to the re-supply of the information, provided that such limitation is permitted by law and is fair and reasonable. For more information, please click here.