Morning Wrap: ASX 200 to rise, Nasdaq touches record as soft US jobs data cools Fed hike bets

In a nutshell:

• A weak September payrolls print took an October Fed hike off the table, with tech leading and the Nasdaq scoring an intraday all-time high

• Iran hardened its stance on Hormuz over the weekend as more tankers were struck and Washington sent a third carrier to the region

• Oil supply relief came from two fronts as the G7 agreed to tap 100 million barrels of reserves and OPEC+ held November output steady

Let's dive in.

• Major US benchmarks higher, finishing off best levels after the Nasdaq touched an intraday record on a softer-than-expected jobs print

• Nasdaq the only major average up for the week, up 0.45%, with the S&P 500 down 0.3% and the Dow down 1.3% amid a global bond rout

• Bond yields reversed higher despite the jobs miss, with the US 2-year yield down as much as 9 bps, but finished the session up 3 bps to 4.82%

• Bond traders pared Fed hike bets after the payrolls miss, pushing two-year Treasury yields down as much as 10bps to 4.69% (BBG)

• Bessent downplayed the Treasury selloff, saying the rise in yields is in line with global trends and dismissing AI bubble concerns (BBG)

• Contagion fears are returning to Europe's bond market, with traders on alert after a selloff led by French debt revived memories of the debt crisis (BBG)

• JPMorgan's Feroli still expects a December Fed hike, saying slower wage growth argues against a hurried hiking cycle (RT)

• Morgan Stanley put Nvidia back atop its semiconductor picks, citing its customer breadth and the importance of GPUs to agentic AI (CNBC)

• Nvidia hit a record intraday high of $237.87, lifting its market value to $5.72 trillion as AI infrastructure names led tech higher (YF)

• Tesla Q3 deliveries down 2% year-on-year to 486,532, ~5% ahead of ests. Production was 464,391 and Semi volume production has begun, but the Roadster was delayed. Shares up ~5% (YF)

• Nike Q1 FY27 revenue down 4% to $11.21bn, ~1% below ests, EPS $0.48. It guided FY27 revenue down high single digits and flagged job cuts, with shares down as much as 6% after hours (YF)

• Broadcom banks are preparing to syndicate $60bn of AI chip financing, a $42bn senior tranche plus an $18bn Blackstone-led junior tranche, to fund chips for Anthropic and others (YF)

• Iran says Hormuz will stay shut until the US meets seven conditions under June's Islamabad memorandum, chief negotiator Ghalibaf said Sunday (CNBC)

• At least two tankers were struck near Oman and Iran over the weekend, one suffering engine room damage, UKMTO reported (CNBC)

• Trump is sending the USS Theodore Roosevelt and about 10,000 sailors and Marines to the Middle East as Iran's inflation nears 90% (BBG)

• Houthis claimed a missile and drone strike on an Aramco facility in Riyadh after a witness saw smoke and fire, though Saudi authorities did not confirm an attack (RT)

• OPEC+ kept November output targets steady at a brief Sunday meeting of seven core members, who meet again on November 1 (RT)

• G7 to release 100 million barrels of oil and diesel over four months, with a front-loaded diesel release within 20 days (CNN)

• Trump ruled out a US diesel export ban after G7 partners agreed to release emergency fuel stocks, saying "we're not going to be doing the export ban" (BBG)

• G7 nations committed to avoid energy export restrictions between members and called on all producers to refrain from bans (YF)

• Fed's Goolsbee says a hike and a pause are both "on the table", calling the labour market steady and inflation the bigger priority (RT)

• Fed seen skipping October but hiking in December, with futures pricing about a one-in-four chance of an October 27-28 move (RT)

• El-Erian says the jobs report puts the Fed "definitely on hold" for October, with the focus staying on inflation (YF)

• Hassett says Powell should "move on" from the Fed board after an internal report cited management failures in the headquarters renovation (BBG)

• US payrolls rose just 29,000 in September against ~85,000 ests, unemployment ticked up to 4.2% and August was revised down to 133,000 (YF)

• US average hourly earnings rose 0.1% month-on-month, 3% year-on-year, trailing August's 3.4% CPI (YF)

• Eurozone inflation jumped to 3.8% year-on-year in September from 3.2%, above the 3.6% forecast and the highest since September 2023, with energy up 18.8% (CNBC)

• Ingenia Communities board is expected to grant Warburg Pincus limited due diligence after last week's $5.25 per share bid, having knocked back earlier approaches at $4.75 and $5.05. The US firm says it has support from at least 30% of the register and is pushing the board to recommend its proposal over the unpopular $1bn Peet acquisition (AFR)

• Rio Tinto draws Singapore sovereign fund GIC into the ~$7bn auction of its Pilbara and Canadian power infrastructure, with JPMorgan mandated on a bid. Ares Management is also preparing an indicative offer, joining IFM, KKR, GIP and Apollo ahead of non-binding bids due mid-month. Rio is yet to decide what stake it retains (AFR)

• Turners Automotive Group declares a Q1 FY27 dividend of 7 cents per share fully imputed, flat on the pcp, payable 29 October with a record date of 13 October (TRA)

• Not a whole lot. A sizeable US payrolls miss drove October Fed hike bets down to 22.1% from 64.4% a week ago, yet US bond yields staged a rather incredible reversal, closing 1-3 bps higher after intraday declines of 6-10 bps. The likely driver was oil, which clawed back a ~4% decline to close 0.5% higher at US$102.66 a barrel. Nevertheless, the ASX is set to trade higher on strong overnight breadth, a slightly lower US dollar and flattish commodity prices. Miners were eager to trade higher, with the Global X Copper Miners ETF rose 3.0% with copper flat at US$6.61/lb, and the VanEck Gold Miners ETF added 1.20% even as gold fell 0.8%.It caps a wild week for the local market, which featured the Tuesday-Wednesday relief rally post RBA/CPI, then Thursday's 2% selloff and Friday's 0.79% bounce. Still, a very awkward and uncomfortable market. It's also a public holiday for NSW (Labour Day), so volume/liquidity could also run a little thin.

Stocks trading ex-dividend:

• Mon 5 Oct: Qualitas Real Estate Income Fund (QRI) – $0.01, Simonds Group (SIO) – $0.005, Verbrec (VBC) – $0.002

• Tue 6 Oct: Harvey Norman Holdings (HVN) – $0.13, Katana Capital (KAT) – $0.005, Reece (REH) – $0.134, Ridley Corporation (RIC) – $0.053

• Wed 7 Oct: MFF Capital Investments (MFF) – $0.11, Ryder Capital (RYD) – $0.03

• Thu 8 Oct: ARB Corporation (ARB) – $0.35, Clime Capital (CAM) – $0.014, Naos Emerging Opportunities Company (NCC) – $0.021, WAM Capital (WAM) – $0.077

• Fri 9 Oct: EQT Holdings (EQT) – $0.20

Other ASX corporate actions today:       

• Dividends paid: AMA Group (AMA), Fenix Resources (FEX), Genesis Minerals (GMD), Teaminvest Private Group (TIP)

• Earnings: None

• IPOs: Normandy Minerals (NMD) 

• AGMs: Djerriwarrh Investments (DJW), Mirrabooka Investments (MIR)

Economic calendar (AEDT):

• 12:00 am: US ISM Services PMI