Wall Street slightly higher, ASX set to rise

Another risk hanging over Wall Street is the slowing U.S. labor market. With inflation down significantly from its peak two summers ago, the biggest concern among investors is that a slowdown in hiring by U.S. companies could get worse.

Rate hikes can take a notoriously long time to fully wash through the economy, and the Federal Reserve had kept its key interest rate at a two-decade high for more than a year until last week. It cut the rate by an unusually large amount in hopes of providing relief to the labor market and the economy.

A report released Tuesday showed that U.S. households are more concerned about the labor market. Their overall confidence level fell in September, rather than rising as economists had expected, according to the Conference Board. That’s a big deal, because U.S. consumer spending is the lifeblood of the U.S. economy.

Shares of Autozone fell 1 percent after the seller of replacement auto parts and accessories said a key measure of sales performance at its U.S. stores barely grew in the latest quarter. It was part of a disappointing report that saw profit and revenue both fall short of analysts’ expectations.

According to AutoZone, customers in U.S. stores continue to postpone purchasing non-essential items.

Another company that relies on American shoppers’ appetite for non-essential items, Thor Industries, rose 6.7 percent after a mixed earnings report. The recreational vehicle maker reported better profit and revenue for its latest quarter than analysts had expected, but it also issued a forecast for the coming fiscal year in which the RV market remains challenged.

“The talk of a softer market is starting to sound like a stuck record, but we remained focused on managing it with increasing efficiency,” said CEO Bob Martin.

One of the bigger winners on Wall Street was Smartsheet, which helps companies manage projects and automate workflows. It rose 6.4 percent after Blackstone and Vista Equity Partners agreed to buy it in an all-cash deal worth US$8.4 billion ($12.2 billion).

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In the bond market, Treasury yields fell after a weaker-than-expected consumer confidence report wiped out earlier gains. The 10-year yield fell to 3.73 percent from 3.75 percent Monday night. The two-year yield, which is more in line with expectations for the Fed’s upcoming moves, fell to 3.54 percent from 3.59 percent Monday night.

Traders raised their predictions about how deep the Federal Reserve will cut interest rates at its next meeting in November, betting on a 58.2 percent probability of another deeper-than-normal cut of half a percentage point. That’s up from a 53 percent probability the day before, according to CME Group data.

On foreign stock markets, indexes rose across much of Europe and Asia. France’s CAC 40 rose 1.3 percent, South Korea’s Kospi rose 1.1 percent and Japan’s Nikkei 225 rose 0.6 percent.

AP

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