Australian shares set to slide after Wall Street slump
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The news: The Australian sharemarket is set to open sharply lower, tracking heavy losses on Wall Street where weak data spurred concerns about a slowing US economy.
The numbers: The Dow Jones index ended 1.21% lower, while the broader S&P 500 fell 1.37% and the tech-heavy Nasdaq lost 2.30%. In the local market, ASX 200 futures were down 144 points or 1.78% to 7,925 points at 7:00am AEST on Friday.
The context: US stocks started the session higher, buoyed in part by gains in Facebook-parent Meta, but the early gains evaporated after data showed a measure of manufacturing activity dropped to an eight-month low in July at 46.8, signifying contraction.
Other data showed the number of Americans filing new applications for unemployment benefits increased to an 11-month high last week, suggesting some softening in the labour market, although seasonal factors also played a role. It prompted Treasury yields to plunge below 4% for the first time in six month.
Investors will eye the government payrolls report later on Friday for any signs of further weakness in the labour market.
What they said: "It raises a genuine fear that the Fed is behind on cutting rates. Few investors have confidence in the Fed sticking to the proverbial soft landing and now the data is starting to support those concerns," Lou Basenese, president and chief market strategist at MDB Capital in New York told Reuters.
The source: Reuters
