US jobs fall, AU GDP, softer but strong
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Why did US Treasury yields fall after the weaker‑than‑expected ADP jobs report?
US Treasury yields fell a little after the ADP job numbers came in weaker than expected in the U.S. Now normally people might not pay too much attention because these numbers are often wrong. But when it's all you've got, it becomes another reason for a rate cut by the Fed next week. Plus, Aussie GDP came in weaker than expected, but maybe strong in the right places. We'll look at the implications of that. Plus, some more PMIs as well. It's Thursdays, the 4th of December, 2020. twenty five. It's the morning call from Nab. Good morning. Well, US stocks have risen again, but not by much, just naught point one percent for the Nasdaq, not point two percent for the S P. Uh we've had uh very small moves as well, uh largely up though in Europe.
Ten year treasury yields down two basis points. Same for Canada and the UK. Aussie ten years rose a few basis points yesterday to four point six four percent, just one basis point lower than that this morning, and a naught point four percent fall in the US dollar, a half percent rise in In the Aussie up to 65.6 US cents now. The yen also up almost half percent. And gold is up, silver is down, oil rising about 1% or so. So there we are. There's all the moves.
Which US market sectors are driving the modest rise in stocks today?
Ken Compton is with me today from NAB in Sydney. So look, although shares are rising in the US, it's energy and financials that are leading the charge. I mean, IT shares are actually down a third of 1% today. Google is up 2.5%, but Microsoft. Apple, Nvidia, Amazon, all down. So there is still this concern, isn't there, about AI, which is uh G plaguing confidence, I suspect. Uh Microsoft is is down because they're having difficulty getting people to spend money on AI, particularly businesses. So that just reaffirms this thing that uh it's a fantastic idea, but is anyone going to make any money from it?
I think that's a pretty fair summation, Phil. Yeah, good morning. Certainly it would just seem that some of the sensitivity around the margins to anything vaguely negative coming out of the the AI story or the big or particularly the you know the the big the big seven in particular. I think the trigger last night mostly was uh some stories that Microsoft was cutting sales targets for some of its business units on on AI platforms or AI related products, and that was enough to generate a yeah, a pretty substantial wobble. for them and and the overall sector. I think those those reports were largely denied, but um but you can still see the lasting impact in the uh in in the relative performance overnight where the uh yeah we' where where Microsoft's behind, as is the tech sector more generally.
Meanwhile, at home yesterday, uh Aussie GDP for Q three, a bit softer than expected, uh naught point four percent uh is what w uh we came in at, um Q on Q. Um so why is it a bit lower than everyone thought it was gonna be?
Yeah, so a a big um in a big miss on the headline number there, technically. The market was looking for point seven, as were we. So the point four number was a was a mild surprise.
How are AI‑related earnings concerns affecting Microsoft and the broader tech sector?
But the key thing is that um you can you can sort of point to point to technicalities around uh a a drag from uh mining inventories in particular as well as well as inventories more generally. So one way to look at that, of course, is that um yeah, d demand is surging ahead of uh short term supply. drawing down inventories but you know constrained to uh constrained to mi to mining in large part. But look the the broad key number there ultimately is the very strong domestic and and private demand growth across the quarter. So the market reaction to that was uh was was pretty w was was weak was weak very briefly, but then um as we got into the detail and I could see how um you know domestic and private demand is turning around things.
things to change pretty uh pretty significantly in terms of the market response. You know, private consumption up point five quarter on quarter, business investment up three point four percent. Um yeah, we did see quite a we we got a good preview of that in the in the data last week where we could see that uh data center construction was up.
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Chapters
8 chapters
1
Why did US Treasury yields fall after the weaker‑than‑expected ADP jobs report?
0:01–1:07
2
Which US market sectors are driving the modest rise in stocks today?
1:07–2:47
3
How are AI‑related earnings concerns affecting Microsoft and the broader tech sector?
2:47–4:48
4
What explains Australia’s softer‑than‑expected Q3 GDP figure and its underlying drivers?
4:48–6:28
5
Why is the ADP private‑payroll count showing a third decline in four months?
6:28–7:39
6
What do the latest global services PMI numbers reveal about Europe, China and Canada?
7:39–9:03
7
How are falling New Zealand dairy prices influencing the wider commodity market?
9:03–10:43
8
Will Australia’s trade balance improve this week and how might gold affect it?
10:43–12:08