Pre Market Report– Thursday 8th August - US Markets slip on Treasury Auction - SPI down 33 - Results Drop

Wall Street closed lower overnight, ending near worst levels. Indices were weighed down by tech stocks and weak demand in treasury auctions, triggering choppy trading. The Dow fell 234 points (-0.80%). Up 480 points at best. Down 266 points at worst. Treasuries came under pressure after 17 blue-chip stocks offered $31.8bn in debt. Spreads between high-grade corporate bonds and US treasuries jumped to 112bps, its highest level since December 2023. The S&P 500 (-0.77%) and NASDAQ (-1.05%) rose in early trade, driven by the BoJ's dovish signals before falling after a weak 10Y US bond auction dampened sentiment. No Fed speak overnight. Markets are now waiting for initial claims data tomorrow, with options markets pricing in a 1.2% move in equities following the report. The probability for a 50bps rate cut in September at 72%, up from 11.8% just one week ago, according to the CME FedWatch tool. Recession chatter has tempered off a little, though JPMorgan economists now see a 35% chance that the US economy will tip into a recession by the end of this year.

ASX to fall. SPI Futures down 33 points (-0.43%).

COMMODITIES

• Oil settles 2% higher on falling US crude stockpiles, rebounds from multi-month lows.
• Copper prices drop on jump in inventories, weak Chinese data.
• Gold buoyed by Fed rate-cut hopes, geopolitical concerns.
• Iron ore extends fall on China demand concern, high supply.
• BHP mulling sale of gold, copper mines in Brazil.
• Glencore to keep coal assets and stick with London listing.
• US crude inventories fall, fuel builds as demand weakens, EIA says.

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