A weak finish for US markets overnight (ahead of the long weekend for Independence Day tomorrow) will mean a weak start in markets in Australia and Asia.
But all eyes will be on the Chinese markets where there was yet another slide yesterday, despite moves by the government and regulators to try and staunch the losses by easing the crackdown on margin lending in particular.
The Dow Jones industrial average fell 27.8 points, or 0.16%, to 17,730.11; the S&P 500 eased 0.64 points, or 0.03%, to 2076.78, and the Nasdaq Composite dropped 3.91 points, or 0.08 per cent, to 5009.21.
All three fell for the week, with the S&P 500’s decline the biggest since March. The Dow had its biggest weekly decline since April, while the Nasdaq had its biggest weekly decline since early May. Both the Dow and the S&P 500 fell 1.2% for the week, while the Nasdaq was off 1.4%
The June jobs report for the US left markets still seeing a rate rise in September.
The government said the US economy created 223,000 new jobs in June, but wages were flat and job gains in the prior two months were cut by 60,000.
The unemployment rate fell to 5.3% from 5.5%, the lowest level since the spring of 2008, but the drop was due to more than 400,000 people leaving the labor force.
European shares were mostly stronger ahead of the Greek vote on Sunday and the IMF surprised after trading by calling for the Europeans to offer Greece ‘comprehensive debt relief” – but the fund also estimated that Greece’s next bailout would need nearly $US60 billion over the next three years.
In Australia, our market will start with a loss of around 19 points – but a bigger factor will be the surprise 6% slide in world iron ore prices to $US55.63 a tonne. That will knock the share prices of the big miners such as BHP Billiton, Rio Tinto and Fortescue Metals Group.
The Aussie dollar was trading around 76.30 US cents this morning.
In Australia, the ASX 200 added 84 points, or 1.5% yesterday, to 5599, clawing back losses from Monday’s silly sell-off and late last week’s weakness, and briefly pushed over flirting 5600 points in the afternoon session.
The All Ordinaries index also rose rose 1.5% or 81 points, to 5587.9. in what was the markets third successive day of gains.
Those gains will be trashed today.
