ASX 200 Expected to Rise While S&P 500 Dips Amid Anticipation of Key Jobs Data

As of 8:30 am AEST, ASX 200 futures have seen a marginal uptick, rising 9 points or 0.11%. In contrast, the US market has experienced a more mixed session. While tech stocks have provided some support, broader market weakness continues, driven by investor caution as they await key economic data. The upcoming US jobs report is a significant factor in determining the Federal Reserve's next move regarding interest rate adjustments.

Tesla has announced plans to introduce its self-driving technology in Europe and China by early next year, a move that could have implications for the broader automotive market. Meanwhile, Arcadium Lithium (ASX:LTM) has become one of the first significant players in the Australian lithium sector to halt operations, announcing the closure of a major facility.

Overnight Market Summary

US markets ended the session with a mixed performance, reflecting uncertainty around economic growth and Federal Reserve policy. Growth and tech stocks, such as Amazon (NASDAQ:AMZN), which rose 2.6%, and Tesla (NASDAQ:TSLA), up 4.9%, offered some positive momentum. However, value stocks underperformed, contributing to an overall weaker market tone.

The market’s focus remains on the Federal Reserve’s next interest rate decision, which could be influenced by tonight’s US nonfarm payrolls report. This report will provide insights into the strength of the US labor market and could sway expectations regarding whether the Fed will opt for a 25 or 50 basis point rate cut at its upcoming September meeting.

Mixed US data has further muddled the outlook, with weaker-than-expected private payroll numbers contrasted by stronger-than-expected services PMI. Investors are left grappling with the implications of both a potential soft landing for the economy or a more significant slowdown.

ASX Market Developments

Back in Australia, Arcadium Lithium (ASX:LTM) has announced the suspension of its waste stripping operations at the Mt Cattlin project, with plans to transition the site into care and maintenance by mid-2025. This development is one of the most significant closures in the local lithium market and may have broader implications for the industry.

In other news, Mineral Resources (ASX:MIN) has faced a challenging week, with its stock down 19.8%. The company’s significant debt load of $4.4 billion and plans for nearly $2 billion in capital expenditures for FY25 highlight the volatility that highly leveraged companies can face in cyclical industries.

Sector Insights and Broader Market Trends

Several key sectors are under pressure following overnight moves in global markets. Uranium and copper sectors are facing weak leads, while gold equities have experienced a bounce due to higher bullion prices.

In terms of companies emerging as winners from the recent reporting season, Brambles (ASX:BXB), AMP (ASX:AMP), Orora (ASX:ORA), and Service Stream (ASX:SSM) have seen strong momentum following notable one-day rallies. These stocks have maintained upward trajectories as investors remain optimistic about their long-term growth potential. On the other hand, companies such as Judo Capital (ASX:JDO), Life360 (ASX:360), Pro Medicus (ASX:PME), and Wisetech Global (ASX:WTC) have also continued to climb, reflecting positive sentiment post-reporting.

Broker Updates

The broker community has issued several updates on key ASX stocks. In a notable move, Guzman y Gomez (ASX:GYG) saw a downgrade in its rating but an upgrade in its target price. Despite being downgraded to a more cautious outlook, the target price was raised to $35 from $31, reflecting the broker's confidence in the company's fundamentals even as its recent stock price surge of 30% since August appears to have outpaced near-term valuation models.

Upcoming Key Economic Data

The economic calendar for the day includes several important updates that could drive market sentiment:

• Australian Home Loans data for July will be released at 11:30 am AEST.
• Germany's Balance of Trade for July will be reported at 4:00 pm AEST.
• Key global data releases include Canada’s unemployment rate and the much-anticipated US nonfarm payrolls report for August, both due later in the evening.

These data points are expected to provide fresh insights into the health of the global economy, with particular focus on how labor market conditions in the US will influence the Federal Reserve’s future policy decisions.