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Wall Street drifts lower ahead of key job data, USD retreats

Wall Street

Wall Street ran off a session high and finished lower on a cautious move ahead of the September non-farm payroll data release, which is expected to add 170,000 new jobs in September and would be under 200,000 for a third consecutive month. However, stronger-than-expected employment data may drive the bond yields higher and hit the stock markets again. At the same time, a sharp decline in crude oil prices could continue to provide investors with a reprieve as the VIX showed signs of retreating from a six-month high.

Mirroring the movement of the US Treasury yields, the US dollar weakened against the other major currencies for the second straight trading day. Notably, the commodity currencies, such as the Australian dollar and the New Zealand dollar, rebounded sharply against the dollar, signalling a recovery in risk appetite.

Most Asian markets are set to open higher, except for Japan. The Nikkei 225 futures were down 0.14%, the ASX 200 futures rose 0.07%, and Hang Seng Index futures were up 0.39%. 

Price movers:

  • 7 out of 11 sectors in the S&P 500 finished lower, with Consumer Staples leading losses, down 2.1%, dragged by Coca-Cola. Real Estate, Healthcare, Financials, and Technology finished in the green., up 0.67%, 0.49%, 0.38%, and 0.25%, respectively.  
  • Coca-Cola’s stocks tumbled 4.8% to just above US$52 per share, the lowest since December 2021. The soft-drink giant’s stocks dropped about 18% year-to-date, heading off the worst year since 2008 amid signs of weakened consumer spending on its drinks.  
  • Rivian’s shares plummeted 24% after the EV maker provided light earning guidance for the third quarter and announced plans to raise US$1.5 billion in convertible notes as a private offering to institutional buyers. The company expects the September quarter revenue to be between US$1.29 billion and US$1.33 billion.
  • GM’s stocks fell to just above US$30 per share, a three-year low amid the UAW strike. The potential recall of 20 million vehicles due to possible air-bag issues also added to the share’s downside momentum.  
  • Crude oil prices tumbled further on demand concerns. Despite OPEC+’s output cuts, the recent data shows that the organization’s production volume rose for the second straight month in September after hitting a bottom in July. Recent bond market turmoil added concerns about the global economy and a gloomy oil market demand outlook.  

ASX and NZX announcements/news:

  • No major announcement.

Today’s agenda:

  • RBA Financial Stability Review
  • Canada Employment change for September
  • US Non-farm payroll for September


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