Across Asia, regional markets have all started the week off on the back foot following the very disappointing US jobs
report. With US markets closed for the Labor Day holiday this evening, traders are very cautious in a risk averse
environment. The Kospi is the worst performer, down 3% while the Shanghai Composite, Nikkei 225 and Hang Seng are all
down between 1.5% and 2.3%.
In Australia, the ASX 200 is currently 2.2% weaker at 4150, just off its intraday lows of 4144. As expected after Friday
night’s dismal non-farm payrolls report investors are dumping equities today ahead of what promises to be a huge week of
economic data, headlined by President Obama’s much anticipated jobs package on Thursday. Losses for the day are broad
based with the heavyweight industrial, financial, materials and energy sectors all seeing declines of between 1.5% and
It’s hardly surprising to see our market on its knees today given the leads and US holiday this evening. The US market
had managed to steer its way through a heavy data load relatively well last week until it got to the all important jobs
number. Any confidence that had started to return to markets quickly evaporated as the jobs report showed zero jobs
growth for last month. It wasn’t just zero growth for August, but they also downgraded July’s figure.
Jobs have been front and centre of this whole recovery debate. The problem is that there simply hasn’t been any
meaningful jobs growth, which is precisely why markets are so worried about slipping back into recession. The
authorities have thrown a lot of stimulus at the problem and to date, it’s basically done nothing.
One of the major reasons why markets are going to struggle to move higher any time soon is the fact that there simply
isn’t any clarity as to how and where these jobs may come from. Markets are realising that there probably isn’t a lot
more authorities can do.
Outside of numerous central bank meetings this week, the big focus is going to be on President Obama’s speech on
Thursday evening where he is expected to detail his latest effort to create jobs. With his approval ratings at all-time
lows, he’s going to need to release something pretty special to convince markets it will work.