Morning Report 4 Oct 19: Stocks recover helped by prospect of lower interest rates

 In US economic data, the ISM services index fell from 56.4 to a 3-year low of 52.6 in September (forecast 55). Orders and employment fell but prices rose.  Factory orders fell by 0.1% in August as expected. According to the Challenger survey, job cuts totalled 41,557 in September, down from 53,480 in August. Claims for unemployment insurance rose by 4,000 to 219,000 in the past week. 

 * European sharemarkets were mixed ahead of the US job figures to be released on Friday. Traders concluded that the US tariffs on European goods wouldn't have a marked broader impact on the European economy. Shares in Airbus rose by 4.25% with spirits maker Remy Cointreau up 6.4%. The pan-European STOXX600 index ended flat. The German financial markets were closed for a holiday. The UK FTSE fell by 0.6%. In London trade, shares of both Rio Tinto and BHP fell by 0.3%. 

 * US sharemarkets were again volatile but traders looked for value in the market heading into the pivotal jobs report. Economic data was softer than expected but that caused more investors to expect a rate cut at the next Federal Reserve meeting. Tech stocks did best. Shares in Microsoft rose 1.3% with Facebook up 2.7%. Shares in PepsiCo rose 3.0% in response to its latest quarterly report. After being down 335 points, the Dow Jones closed near session highs, up by 122 points or 0.5%. The S&P500 index rose by 0.8% and the Nasdaq gained 87 points or 1.1%

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