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As of 8:30 am AEST, ASX 200 futures are showing minimal movement, rising just 2 points or 0.02%. This reflects uncertainty in the global markets, particularly following a weak overnight performance in the United States.
US Market Performance Overview
US markets experienced early strength but faded by the session's close. The 2-and-10-year Treasury yield curve shifted into positive territory as markets continue to anticipate potential Federal Reserve rate adjustments. In contrast, US job openings have hit a three-and-a-half-year low, indicating a softening labor market. The combination of these factors, along with declining commodity prices, has contributed to ongoing concerns about economic growth.
In the US, key benchmarks closed in negative territory despite early gains:
- Russell 2000 rose as much as 0.78%
- Nasdaq gained 0.59% at its peak
- Dow Jones advanced 0.58%
- S&P 500 reached a session high of 0.44%
However, these indices fell back, weighed down by concerns surrounding the yen carry trade, stretched market positioning, persistent selling pressure in Nvidia (NVDA), and seasonal September market weakness.
Oil Prices and Commodities Slump
The commodity markets have also extended recent declines, with Brent crude falling 1.3%, slipping below the critical $75 mark for the first time since December 2023. Concerns around global growth and rising inventories have contributed to this significant drop, and ongoing weakness in commodities remains a key theme for global markets.
ASX Outlook for Today
The ASX 200 futures are pointing to a flat open, reflecting subdued market sentiment following Wall Street's decline and continued weakness in commodities. Wednesday's volatility saw the local VIX spike 21%, reaching a three-week high of 13.6. This suggests that Australian markets may struggle to gain traction amid the current global uncertainty.
In corporate news, Challenger (ASX:CGF) has drawn attention as major shareholder Apollo looks to divest a 10.6% stake, with the sale underwritten at a floor price of $6.51 per share, according to the Australian Financial Review (AFR). Additionally, Star Entertainment (ASX:SGR) is facing challenges with its banks, which have pushed back against the company’s request for short-term debt relief. Banks are reportedly insisting that any new loans must come with concessions from the government.
Key Factors to Watch Today
Market participants will be closely monitoring whether local sectors can resist the broader negative momentum seen in global markets. With little in the way of positive catalysts, and following the overnight trend in the US, it remains to be seen whether Australian equities can remain flat or whether the selling pressure will push markets lower.
Commodities, in particular, will continue to be a focal point. The sustained weakness in oil prices, along with declines in other key resources, could weigh on the performance of energy and mining sectors. Moreover, ongoing market volatility may further dampen investor sentiment.
With the local market facing a weak lead from Wall Street and subdued commodity prices, today's session could see sectors facing increased headwinds, continuing the cautious mood that has dominated the start of September.
