ASX NEWS LIVE | ASX to Rise with US Stocks as China’s Misstep Sees Oil and Iron Ore Plummet

Australian shares are higher around midday as consumer, telco’s and utility stocks rallied, countering weaker commodity prices.

The ASX 200 is up +0.53% to 8,220.4, with nine out of eleven sectors gaining.

Wall Street’s near-record highs overnight were driven by tech stocks, led by Nvidia’s +4.1% jump bolstering sentiment.

On the ASX, Consumer discretionary and utility sectors led the gains. Wesfarmers and Aristocrat Leisure rose around +1.7%, while APA Group surged 3.4% following a favourable regulatory decision. Origin Energy also climbed +1%.

However, commodity sectors limited overall gains. Energy stocks fell -1.5% as oil prices dropped over 4% overnight, partly due to China’s modest stimulus plans.

Woodside Energy and Santos declined -2% and -1.4% respectively. The mining sector also weakened, with BHP and Rio Tinto down -1.1% and -1.4%, following a 5% plunge in iron ore prices to around US$104 per tonne in Singapore.

Apart from the large-cap moves, its been a relatively quiet day for news on the ASX, with few major announcements so far.

Here’s the latest from our Fat Tail Daily video series. Another double day of videos for lucky viewers.

Publisher James ‘Woody’ Woodburn sits down with our editors to discuss the key trends traders are looking at and offer unique insights into market movements.

In the latest video, James spoke with Australian Small Cap Investigator Editor Callum Newman.

Suddenly, oil prices are jumping up and down on international exchanges.

It’s easy to see why. Israel is threatening to directly attack Iranian oil facilities. This threatens already tight global supply. War, of course, is disastrous human behaviour. It’s heartbreaking, too. And not something anyone wants to see.

But the investment markets are our beat here at Fat Tail. And it’s to the investment implications we turn today. Oil and energy dynamics are a complicated, fast-moving environment. And, from a trading viewpoint, fraught with risk and potential reward.

The balance between the two can shift on a dime. That’s why today, analyst Callum Newman gives you his take on whether oil shares are the trade to take…

To read Callum’s original article, click here.

Click below to watch the discussion.

The National Federation of Independent Business (NFIB) reported that while small business optimism in the U.S. remained stable in September, uncertainty reached record levels.

The NFIB Small Business Optimism Index rose slightly to 91.5, below expectations and the 50-year average.

The Uncertainty Index jumped to an all-time high of 103.

NFIB Chief Economist Bill Dunkelberg noted that this uncertainty is causing hesitation in spending and investments. Capital outlays and inventory gains decreased, while job openings hit their lowest point since January 2021.

However, expectations for higher sales improved slightly. Inflation persisted as a top concern, with 23% of owners citing it as their most pressing issue.

22% of businesses reported price increases, with 25% planning future hikes.

Compensation trends showed a slight decline in wage increases, though more owners plan to raise pay in the coming months.

The survey indicates that small businesses face challenges with economic uncertainty, staffing, and inflationary pressures as they approach the holiday season.

US small business optimism remaining low, uncertainty high.
(EvercoreISI chart) pic.twitter.com/eXtM5DZv0r

— Shane Oliver (@ShaneOliverAMP) October 8, 2024

Good morning. Charlie here,

The ASX 200 opened up +0.28% to 8,199.6, following Wall Street higher overnight (ex-resources) despite plummeting iron ore and oil prices overnight.

With the situation in the Middle East taking a backseat to a touted large policy meeting in China yesterday, investors were left disappointed as few concrete steps were announced.

Chairman of the National Development and Reform Commission (NDRC) Zheng Shanjie told a press conference the government planned to issue 200 billion yuan ($42 billion AUD) in advance budget spending and investment projects from next year.

‘The international market is volatile, global trade protectionism has intensified, and uncertain and unstable factors have increased. These will have an adverse impact on my country through trade, investment, finance and other channels,’ Zheng said.

Despite this, he remained ‘fully confident’ that China would meet its 5% GDP growth targets despite the troubled economy.

Overall, the meeting was a failure. China’s big mistake was raising investors’ hopes with talks of a large policy announcement, only to repeat the same platitudes.

In the runup to the meeting, investors had been scrambling to gain exposure to Chinese stocks and iron ore futures, which rose by nearly 5%. After the meeting, we saw the Hang Seng drop nearly -10%, Oil fall -4%, and Iron ore futures lose -5%.

In other news, the New Zealand Central Bank meets today to deliberate interest rates. The RBNZ is expected to make a decision around midday on interest rates.