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A weaker-than-expected jobs report out in the US on Friday sparked a broad sell-off to end the week on Wall Street as recession fears continue to rise. The Dow Jones fell 1.51% on Friday, the S&P500 lost 1.84% and the tech-heavy Nasdaq tumbled 2.43%. The unemployment rate in the US rose to the highest level since October 2021 in July to a rate of 4.3%, while nonfarm payrolls grew by just 114,000 last month. The bond market was flooded on Friday as investors seek out safe-haven assets, which saw the US 10-year Treasury Yield fall to its lowest level since December.

Second quarter results out of Amazon led to a sell-off in the tech giant after the company missed expectations and issued a disappointing forecast which signals easing growth in the AI and tech space.

Intel also tanked 26% after announcing weak guidance and widespread layoffs.

Over in Europe, the global sell-off on Friday extended into the region with the STOXX 600 ended the day down 2.82% led by financial services and banking stocks falling 5.22% and 4.35% respectively. Germany’s DAX ended Friday’s session down 2.33%, the French CAC fell 1.61% on Friday and, in the UK, the FTSE100 closed out the week with a loss of 1.31%. The fall in the FTSE100 came despite the Bank of England cutting interest rates for the first time since December 2020 on Thursday last week.

Across Asia on Friday, it was a sea of red led by Japan’s Nikkei tumbling 5.81% marking its worst session since March 2020 as Daiwa Securities tumbled 18.85%. Hong Kong’s Hang Seng ended Friday’s session down 2.32%, South Korea’s Kospi index fell 3.65% as inflation data came in higher than expected for July, and China’s CSI index ended the day down 1.02%.

Locally on Friday, the ASX200 fell 2.11% in its worst day since March 2023, retreating from the all-time high reached on Thursday. For the week though the ASX200 notched a slight 0.28% gain as communications services stocks did most of the heavy lifting with a 2.14% rise. Retailers took the biggest hit on Friday as investors assessed weakening economic conditions at home and overseas, with Wesfarmers falling 2.9%, and Premier Investments ending the day down 2.2%. Block Inc was a rare winner on Friday with a rise of 5.1% after the company flagged a new US$3bn share buyback and upgraded its full-year guidance.

What to watch today:

• Ahead of Monday’s session on the ASX the SPI futures are anticipating the market to open Monday’s session down by a large 1.46%.
• On the commodities front this morning oil is trading 3.66% lower at US$73.52/barrel, gold is down 0.12% at US$2442/ounce and iron ore is up 1.14% at US$104/tonne.
• AU$1.00 is buying US$0.65, 96.32 Japanese Yen 50.82 British Pence and NZ$1.09.

Trading Ideas:

• Bell Potter has significantly increased the 12-month price target on Clarity Pharmaceuticals (ASX:CU6) from $4 to $10 and maintain a speculative buy rating on the cancer imaging and therapy treatment development company following the release of a Q4 cashflow statement and quarterly activities report out of the company. Gross cash burn was around $14m, net cash burn was inclusive of $10m in R&D credit was around $4m, and Bell Potter’s analyst estimates the cash runway extends deep into CY26. The company continues to focus on two trials in prostate cancer which continue to show outstanding safety with good indications of efficacy.

• And Trading Central has identified a bearish signal on Mirvac Group (ASX:MGR) following the formation of a pattern over a period of 17-days which is roughly the same amount of time the share price may fall from the close of $2.10 to the range of $1.71 to $1.79 according to standard principles of technical analysis.

And that’s all for this Monday, be sure to look out for FY24 results out of Cettire, AGL Energy and Arcadium Lithium out tomorrow.