US jobs data released last Friday (6 September) was not what investors had been hoping for, which saw US markets end the week in the red, and the ASX starting its week out the same way.
The S&P/ASX 200 tumbled 64.40 points, or 0.80%, to 7,949 points at 10:55am AEST, despite crossing above its 20-day moving average.
The expectation was for non-farm payrolls to grow over 165,000 in August, but the US Bureau of Labor Statistics shows growth of only 142,000, and the unemployment rate little changed at 4.2%.
This further fuelled concerns that the US economy was headed for a downturn, despite the fact that hiring in August increased over July, and the Federal Reserve had been too slow to cut rates.
Arian Neiron, Managing Director and head of Asia-Pacific at VanEck, was quoted by the Australian Financial Review as saying jobs data is a good indicator that the US is pivoting towards a weakening in the economy.
He says investors should be prepared for further spikes in volatility, particularly as the Bank of Japan may raise interest rates again.
The S&P/ASX 200 Volatility Index (VIX) climbed 0.67 points, or 5.25%, to 13.40 points. Over the last five days, the index has gained 22.49% and 19.32% year to date.
All 11 sectors are lower today, led by the financial services sector, which slid 1.35%. Energy shifted 1% lower, while materials edged back 0.28%.
Among the bottom performing stocks were gold producer Red 5 (ASX:RED), which slipped 5%, and copper producer Sandfire Resources (ASX:SFR), which retreated 4.46%.
The S&P/ASX200 Index has lost 1.77% for the last five days, and sits 2.45% below its 52-week high.
The S&P/ASX200 is Australia’s leading share market index which contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: ASX & US Department of Labor
