The Dow breaks three-day losing streak: Oil prices drop by over $5

The Dow Jones Industrial Average broke a three-day losing streak Wednesday as Treasury yields pulled back from multi year highs following the release of much weaker-than-expected jobs data.

The 30-stock index gained about 127 points, or 0.4 per cent. The S&P 500 added 0.8 per cent, and the Nasdaq Composite gained 1.3 per cent.

Tesla and Norwegian Cruise Line saw gains, adding nearly 6 per cent and 3.8 per cent, respectively.

On the other end, Devon Energy and Marathon Oil fell about 5 per cent, while Halliburton and APA each slid more than 4 per cent.

Wednesday’s moves follow the release of new jobs data. ADP said 89,000 private payrolls were added last month. That’s well below a Dow Jones forecast of 160,000 and fewer than an upwardly revised 180,000 payroll additions from August.

Treasury yields pulled back slightly from their 2007-level highs on the data. The 10-year Treasury yield was last trading at 4.729 per cent.

Higher interest rates have increased fears of a recession and have pushed mortgage rates near 8 per cent. Consequently, mortgage demand fell to its lowest levels since 1996.

Investors remain on edge and are looking toward Friday’s release of September’s nonfarm payrolls data for more indications on the strength of the labour market.

Turning to commodities, Oil prices dropped over $5 overnight, due to declining fuel demand and a pessimistic economic outlook, with Brent crude settling at $85.81 per barrel, down 5.6 per cent, and WTI falling to $84.22, also down 5.6 per cent.

Gasoline demand hit its lowest level this year, possibly due to weather disruptions and a 30 per cent fuel price surge in the third quarter, causing a counter-seasonal demand drop of 223,000 barrels per day, while gasoline stocks rose significantly.

Saudi Arabia and Russia continued their production cuts, but declining refining margins and economic concerns may challenge their ability to address weakening demand.

The International Nickel Study Group anticipates that the global nickel market surplus will expand to 239,000 metric tons by 2024, up from 223,000 metric tons in the current year, potentially exerting further downward pressure on nickel prices that have already fallen by about 38 per cent in the current year. This surplus is projected to occur amid a growth in global nickel demand to 3.47 million metric tons in 2024, driven by the recovery of the stainless-steel sector and increased usage of nickel in electric vehicle (EV) batteries.

Overall, Within the S&P 500, consumer discretionary was the best-performing sector, rising nearly 2 per cent. Energy was the index’s worst-performing sector Wednesday as a result of the fall in oil prices.

Futures

The SPI futures are pointing to a 0.5 per cent gain.

Currency

One Australian dollar at 7:30 AM was buying 63.27 US cents.

Commodities

Gold has lost 0.24 per cent. Silver has fallen 0.87 per cent. Copper has lost 1.10 per cent. Oil has dropped 5.09 per cent.

Figures around the globe

European markets closed mixed. London’s FTSE fell 0.77 per cent, Frankfurt added 0.10 per cent, and Paris closed flat.

Turning to Asian markets, Tokyo’s Nikkei lost 2.28 per cent, Hong Kong’s Hang Seng fell 0.78 per cent while China’s Shanghai Composite was closed.

The Australian share market closed 0.77 per cent lower at 6,890.20.

Ex-dividends

ARB Corporation (ASX:ARB) is paying 30 cents fully franked
Clime Capital (ASX:CAM) is paying 1.35 cents fully franked
Future Generation (ASX:FGG) is paying 3.6 cents fully franked
WAM Alternative (ASX:WMA) is paying 2.5 cents fully franked

Dividends payable

Atlas Arteria Ltd (ASX:ALX)
Breville Group Ltd (ASX:BRG)
Corporate Travel Management Ltd (ASX:CTD)
Fletcher Building Ltd (ASX:FBU)
Generation Development Group Ltd (ASX:GDG)
Gold Road Resources Ltd (ASX:GOR)
Inghams Group Ltd (ASX:ING)
Kina Securities Ltd (ASX:KSL)
Medibank Private Ltd (ASX:MPL)
Servcorp Ltd (ASX:SRV)
Service Stream Ltd (ASX:SSM)
Wesfarmers Ltd (ASX:WES)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

Disclaimer

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