Wall St mixed, Iron ore price falls, BHP ex-div today, Why Webjet is a buy: ASX to dip

Global shares started September in a mixed fashion after investors digested mixed economic data. Wall St reacted to the private jobs numbers while Eurozone’s taper and inflation talk heats up. Back home, the economy grew for the quarter. 

The Australian sharemarket is set to fall with the SPI futures pointing to a 0.2 per cent dip.

Stocks close mixed as Nasdaq hits new record high

On the first official day in September, after seven straight months of gains, investors piled into tech shares on Wall St. The Nasdaq hit a new record high as bond yields remained steady. The S&P 500 eked out a gain while the Dow Jones just edged lower.

ADP Private sector added 374,000 jobs in August

Investors reacted to the automatic data processing (ADP) payroll numbers after 374,000 private sector jobs were added in August. This is up from 330,000 in July however, this number was a big miss from the 613,000 that the market was expecting.

Most of the new positions came in the leisure and hospitality sector with 201,000 new jobs added, which aligns to the reopening story we have been talking about. The education and health services sector saw 59,000 new jobs followed by the trade, transportation and the utilities space with 18,000 new jobs.

The path forward with monetary policy lies on “substantial further progress” in the jobs market. The longer we go without significant gains, the likely extended duration that low interest rates and borrowing rates are here to stay.

Amid the backdrop of this data, we have seen the struggle to get people back into the workforce as the delta variant of Covid-19 continues to spread. Businesses have been boosting wages and increasing incentives to attract new workers.

Oregon McDonald’s hangs banner outside calling on 14-year-olds to apply

One example of this is a McDonald’s in Oregon. They are now hiring 14 and 15 year olds as they go to the other side of the age spectrum in an effort to bring more people into the labour market.

If we look at some other economic news, a reading on U.S. manufacturing from the Institute of Supply Management showed it picked up in August as orders continued to grow, however factory employment dropped to a nine-month low, so scarcity around workers has been a variable to these results.

Hiring spree on the card by Amazon, plans to recruit 55,000 new employees

In company news, Amazon rose 0.2 per cent after announcing a major hiring drive. The company is planning to hire 55,000 people for corporate and technology roles globally in the next few months. For some context, that is more than a third of Google’s staff at the end of June and nearly all of Facebook’s employees. It comes after the company unveiled the date for their Career Day later this month. Of the 55,000 jobs, over 40,000 will be in the United States, while others will be in countries such as India, Germany and Japan.

Wall St mixed as treasury yields remain steady

At the close, the Dow Jones lost 0.1 per cent to 35,313, the S&P 500 eked out a 0.03 per cent gain at 4,524 while the Nasdaq hit a fresh new high adding 0.3 per cent at 15,309.

The yield on the 10-year treasury note remained steady at 1.30 per cent.

Across the sectors on the S&P 500, defensives advanced. Real estate rose 1.7 per cent followed by Utilities at 1.3 per cent. Consumer staples, communications service, technology and healthcare rose. Energy was the worst performer, down 1.5 per cent followed by financials. The other sectors closed in the red.

European markets closes mixed as inflation debate heats up

Across the Atlantic, European markets also closed mixed as investors took a cautious approach as the taper and inflation debate heats up. Eurozone’s consumer price inflation hit 3 per cent, its highest level since November 2011 versus the central bank’s target of 2 per cent. Their unemployment rate fell to 7.6 per cent in July from 7.8 per cent the month before.

In Paris, the CAC gained 1.2 per cent, Frankfurt closed 0.1 per cent lower and London’s FTSE added 0.4 per cent lifted by the retail and travel stocks.

In U.K. trade, miners both fell. Rio Tinto dipped 0.9 per cent and BHP fell 1.2 per cent.

Asian markets gain as China’s business conditions slightly deteriorate

Asian markets closed higher as investors shrugged off signs of manufacturing data softening.

In China, the Caixin survey of manufacturing pointed to a softening of the world’s second-largest economy. The IHS purchasing managers’ index which fell to 49.2 in August from 50.3 the month before as supply chain delays worsened amid an uptick in Covid-19 cases. The report also said that the output and new orders both declined modestly as companies trimmed purchasing activity and staffing levels.

Tokyo’s Nikkei gained 1.3 per cent, Hong Kong’s Hang Seng added 0.6 per cent and China’s Shanghai Composite closed 0.7 per cent higher.

ASX 200 almost recover losses after GDP figures

Yesterday, the Australian share market closed 0.1 per cent lower at 7,527 after recovering their early losses that day. The local bourse had been down by 0.6 per cent before lunchtime before investors digested our GDP figures, which grew by 0.7 per cent during the June quarter.

Across the sectors, energy rose 1.3 per cent followed by financials, communication services and real estate. Utilities eked out a gain of 0.04 per cent. Consumer staples and discretionary fared the worst by 1.5 per cent and 1.2 per cent respectively with technology shedding the least at 0.08 per cent.

Local economic news

Today the Australian Bureau of Statistics is set to publish international trade and lending figures for July.

Broker moves

Ord Minnett rates Webjet (ASX:WEB) as a buy with a price target of $7.02. The broker expects Webjet to deliver around a $15 million loss in first half FY22 followed by a return to profitability in second half FY22.

During the AGM trading update, Webjet stated it will be operating cash flow-positive in the first half FY22. They also re-affirmed that the company is on track to deliver cost reductions of 20 per cent versus pre-pandemic.

The stand out for the broker is that the recovery in earnings from the WebBeds Division, their B2B channel, was profitable in July and August. The company is on track to be profitable in September and is likely to gather momentum, noting that January to March 2022 is a quieter period.

The broker believes Webjet is on track to get back to pre-covid earnings faster than its rivals.

Shares in Webjet (ASX:WEB) closed 0.88 per cent higher at $5.74 yesterday 

Ex-dividends

BHP Group Limited (ASX:BHP) is paying 273.5604 cents fully franked.
Big River Industries Ltd (ASX:BRI) is paying 3 cents fully franked.
CSL Limited (ASX:CSL) is paying 161.4006 cents 10 per cent franked.
Clinuvel Pharmaceuticals (ASX:CUV) is paying 2.5 cents unfranked.
Deterra (ASX:DRR) is paying 11.52 cents fully franked.
Gale Pacific Limited (ASX:GAP) is paying 2 cents unfranked.
GR Engineering Services Ltd (ASX:GNG) is paying 7 cents fully franked.
Home Consortium (ASX:HMC) is paying 6 cents 50 per cent franked.
Ironbark Capital Ltd (ASX:IBC) is paying 1.25 cents fully franked.
Integral Diagnostics (ASX:IDX) is paying 7 cents fully franked.
InvoCare Limited (ASX:IVC) is paying 9.5 cents fully franked.
Jumbo Interactive (ASX:JIN) is paying 18.5 cents fully franked.
Lifestyle Communities (ASX:LIC) is paying 5 cents fully franked.
MACA Limited (ASX:MLD) is paying 2.5 cents fully franked.
NIB Holdings Limited (ASX:NHF) is paying 14 cents fully franked.
Perpetual Limited (ASX:PPT) is paying 96 cents fully franked.
Platinum Asset Management (ASX:PTM) is paying 12 cents fully franked.
Schaffer Corporation Ltd (ASX:SFC) is paying 45 cents fully franked.
Sealink Travel Group (ASX:SLK) is paying 9 cents fully franked.
Woolworths Group Ltd (ASX:WOW) is paying 55 cents fully franked.

IPO

We have two companies set to list on the ASX today.

Rubicon Water (ASX:RWL) is a water technology solutions business that designs, manufactures, installs and maintains irrigation automation software and hardware.

Tek-Ocean (ASX:T3K) is set to join Rubicon. They provide end-to-end service solutions for the energy industry.

Commodities

Iron ore has lost 6.7 per cent to US$143.43. Their futures are pointing to 0.6 per cent gain.

Gold has lost $2.10 or 0.12 per cent to US$1816 an ounce while silver has gained $0.22 or 0.9 per cent to US$24.22 an ounce.

Oil was up $0.09 or 0.1 per cent to US$68.59 a barrel after OPEC and its allies agreed to stick to the previously announced plan to gradually increase output.

Currencies

One Australian Dollar at 7:40 AM is stronger from yesterday buying 73.71 US cents, 53.54 Pence Sterling, 81.13 Yen and 62.27 Euro cents.
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