Good morning! It’s Friday, and it was a horror night on the markets in the US. Here’s what you need to know…
1. Stocks got crushed in the US trading session, with the S&P down 2%, the Nasdaq down 2.1%, and the Dow down 1.9% – it shed more than 300 points. The trigger was unclear but two things: there was a spike in the employment cost index, which basically shows wages growing and signals some inflation heat – which will put pressure on the Fed to bring forward rate rises. There was a big fall in the Chicago PMI, which printed 52.6 when the market expected 63.0. It’s the biggest monthly fall since October 2008 (and we know what happened then). MNI Chicago said purchasing managers saw the fall as a lull rather than the start of a downward trend. Combined with Argentina’s default the day before, it made for a messy session. Is it the start of something? Who knows. Business Insider editor-in-chief Henry Blodget looks at the high valuations in US stocks here.
2. The focus will now be on the US jobs report, out tonight at 10.30pm AEST. Economists are expecting 230,000 non-farm payrolls added for the month of July. This will follow the 288,00 added in June, a strong result which reassured markets that America’s recovery was on track. Following the big 4% Q2 US GDP print this week the market will be looking for continued momentum in the recovery. Myles Udland has more here.
3. Australian futures are sharply lower ahead of the start of trade here with the September SPI 200 contract down 51 points to 5,518. The ASX hit post-GFC highs again yesterday but based on the US lead it’s likely to slip back below 5600 today. Shanghai’s reaction to the US sell-off will be interesting to watch after a gain of almost 1% yesterday. In Australia we get the AiG PMI report this morning, with economies around the world to follow through the day.
4. The Ebola virus is coming to the US. At least one patient will be treated in Atlanta, and will arrive “within the next several days,” according to a statement from hospital authorities released a short time ago. It’s an unsettling development in the current outbreak, which has killed more than 600 people in three African countries and shows no signs yet of being under control.
5. In a huge win for Australian startups, the punitive tax arrangements for employee share schemes looks set for the chop by the Abbott government, according to a report in the AFR this morning. The rule, which assigned a value to shares allocated to employees by company owners and then made them pay tax up front (no, not kidding!), has been a hated regulation for startups in Australia for years and been blamed for allowing tech multinationals to raid the talent pool. Big win for Aussie entrepreneurs.
6. A US baseball player got traded in the middle of a game, with the type of scenes you’d only see in American sport. Austin Jackson was on the field for the Detroit Tigers when news came he had been signed off to the Seattle Mariners. Tigers manager Brad Ausmus came out to talk to the home plate umpire and Jackson walked off in the seventh innings. His old fans gave him a standing ovation.
7. Triadic closure is a fancy term for why two people are likely to be closer when they have a common friend. So if you want someone to like you, be friends with their friends. There’s this, and 15 other research-backed ways to make people like you, here.
8. Tails never fails? Bet against a winning run and you’ll most likely come out worse off, say a group of London professors. They investigated the “Gambler’s Fallacy”, which in roulette terms is the tendancy to suspect that because the last seven spins have come up red, a black is bound to appear soon. Trust them – it’s always a 50-50 bet. And handily, they have an option for how to best deal with.
9. It’s credit card PIN day. Signatures on credit card dockets will be replaced by PIN-only transactions in Australia today. Don’t panic: there’s a three-month crossover period. Restaurateurs we spoke to are unworried, but Rockpool’s Neil Perry made this point: “I have spent 39 years of my life trying to put the romance into restaurants, presenting a card machine at the table takes that right away.”
10. Pinch yourself. The NSW Waratahs play for the Super Rugby title tomorrow night, taking on the mighty Crusaders – whose squad would make a decent All Blacks side – tomorrow night in Sydney. Just when NSW was starting to think “Waratahs” was the Aboriginal word for “it’ll never happen”, they’re in a home-ground final. Go. The. Tahs.
Bonus item: It’s a bit difficult to follow up yesterday’s clip of cows chasing a remote control car around a field. But here, courtesy of an executive who is a daily reader of this column, is a cat in a shark costume cleaning the kitchen on a robot vacuum cleaner.
And they let these people make decisions. Have a great weekend. Go Tahs.
I’m on Twitter: @colgo
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