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The local bourse held on to its gains after the Australian Bureau of Statistics said the nation’s unemployment rate remained at 4.1 per cent in September, while the participation rate climbed to a record high of 67.2 per cent.
The strong employment figures suggest the labour market was not easing as quickly as expected, said Oxford Economics Australia’s head of macroeconomic forecasting, Sean Langcake.
“These data are not strong enough to provoke a rate hike from the RBA. But, we do think they support our view that a rate cut is further away than the market currently thinks,” he said, predicting the first rate cut won’t be coming before the second quarter of next year.
Overnight on Wall Street, US stocks bounced back following better-than-expected profit reports from Morgan Stanley, United Airlines and other big companies to regain much of their losses from the day before.
The S&P 500 closed 0.5 per cent higher, a day after sliding from its all-time high because of tumbling energy and technology stocks. The Dow Jones added 337 points, or 0.8 per cent and the Nasdaq composite rose by 0.3 per cent.
Wall Street bounced back on Wednesday.Credit: AP
Morgan Stanley rallied 6.4 per cent after reporting stronger profit for the latest quarter than analysts expected. CEO Ted Pick said the investment bank enjoyed a “constructive environment” in its businesses around the world. And with stock prices near records, it’s managing even more money for clients.
United Airlines flew 12.4 per cent higher after reporting a milder drop in summer profit than expected and announcing plans to send up to $US1.5 billion ($2.3 billion) to its shareholders by buying back its stock.
Energy stocks were holding steadier, including a 0.3 per cent tick higher for Exxon Mobil, a day after sliding to some of the market’s worst losses. They’ve been generally following the price of oil.
US technology stocks were also holding up better a day after a market-shaking warning from ASML, a Dutch supplier to the chip industry.
ASML CEO Christophe Fouquet said on Tuesday that artificial intelligence continues to offer strong upside potential, but “other market segments are taking longer to recover.” That helped lead to slides of 3.5 per cent for Broadcom and 4.7 per cent for Nvidia on Tuesday. A day afterward, both were rising, and Nvidia’s gain of 3.1 per cent was the strongest single force pushing upward on the S&P 500.
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Stock indexes were mixed across the rest of Asia and Europe. In London, the FTSE 100 rose 1 per cent after the government reported UK inflation eased in September to its lowest level in more than three years. That reinforced expectations that the Bank of England will cut interest rates at its next policy meeting.
With AP
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