The S&P/ASX 200 Index (ASX: XJO) is taking a beating today.
The benchmark Aussie index closed down 0.5% yesterday, ending the day at 8,753.4 points.
In morning trade on Friday, the ASX 200 is down another 1.5% at 8,621.4 points.
Turning to the three biggest ASX-listed companies, Commonwealth Bank of Australia (ASX: CBA) shares are down 1.9% at $157.18; the BHP Group Ltd (ASX: BHP) share price is down 1.8% at $42.54; and shares in Aussie biotech giant CSL Ltd (ASX: CSL) are down 0.7% at $180.59.
Here's what's got investors favouring their sell buttons today.
Image source: Getty Images
What's pressuring the ASX 200 today?
The ASX 200 is facing headwinds on several fronts today.
First, we have the lingering impact of Thursday's surprisingly strong domestic jobs report. The market came under pressure midday yesterday when the ABS revealed that Aussie unemployment in October fell to 4.3%, down from 4.5%.
While that's good news for the workers and the economy, it further reduces the odds investors will see an RBA interest rate cut anytime soon.
The ASX 200 is also catching headwinds from ongoing government disruptions in the United States, despite the reopening of the Federal branch.
Overnight, the S&P 500 Index (SP: .INX) closed down 1.7%, and the tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) shed 2.3% as markets digested the fact that the US Fed will be working without access to the core economic data it depends on to make interest rate decisions. This has also dampened prospects for another rate cut in the world's top economy in 2025.
Tech stocks, which tend to be more sensitive to interest rate moves, are also taking a bigger hit on the Aussie market today, with the S&P/ASX All Technology Index (ASX: XTX) down 2.6% today.
What are the experts saying?
Commenting on the diminishing prospects of an RBA rate cut, Ben Jarman, JPMorgan's chief rate strategist, said (quoted by The Australian Financial Review), "We already thought the RBA was done easing, and this report consolidates that sense."
Offering a silver lining for ASX 200 investors, Jarman doesn't believe we'll be seeing the RBA lift interest rates above 3.60% anytime soon either.
As for the ructions in US stock markets, Matt Maley at Miller Tabak + Co said (quoted by Bloomberg):
It's an expensive market and expensive markets need lower rates to help justify today's elevated valuations. So, the idea that this could change quickly with so much data coming out all at once, this uncertainty is raising some fear in the marketplace.
Chris Grisanti at MAI Capital Management added, "It's just a normal market rotation away from what's been working. It's probably healthy, though boy, it's painful in the short term."
The ASX 200 remains up 4.8% since this time last year.
