Source : the age
By Gemma Grant
Welcome to your five-minute recap of the trading day.
The numbers
The Australian sharemarket see-sawed on Thursday, reversing early losses to settle higher at the close. Wall Street continued its wild swings overnight as evidence builds that the US economy is buckling under the weight of US President Donald Trump’s trade war.
It was another day of wild swings on the New York Stock Exchange.Credit: Bloomberg
The S&P/ASX 200 finished up 19.4 points, or 0.2 per cent, to 8145.6 after a mixed session on Wall Street. Seven of its 11 industry sectors were in the green, with heavy losses from miners and energy stocks. The Australian dollar was trading at US63.98¢.
The S&P/ASX 200 rose 0.7 per cent on Wednesday, shrugging off higher-than-expected local inflation numbers to gain for a fifth straight day as investors kept betting on another interest rate cut from the RBA next month.
The lifters
Supermarket giant Woolworths gained 1.2 per cent after the nation’s biggest grocer said its third-quarter sales edged up 3.2 per cent to $17.3 billion, boosted by a 16 per cent jump in online sales. Its biggest rival Coles on Wednesday unveiled a 3.7 per cent sales lift over the three months from early January. Coles gained 1.3 per cent on Thursday.
Third-quarter sales at Woolworths edged up 3.2 per cent.Credit: Louie Douvis
Platinum Asset Management jumped 11.4 per cent after it said it was in merger talks with L1 Capital, a deal that would create a business with about $18 billion in funds under management. Platinum also said its co-founder Kerr Neilson, who left the board in 2022, had sold a 9.6 per cent stake in Platinum to L1.
Tech stocks were the best performers on the ASX across the day, continuing their solid performance this week after better-than-expected earnings from global tech giants Microsoft and Meta, the parent company of Facebook and Instagram, which had US tech stocks rallying in after-hours trade. WiseTech Global soared 6.6 per cent while Technology One gained 2.5 per cent. Data centre operator NextDC also gained 4.6 per cent.
The laggards
The mining heavyweights slightly pared back their losses from lunchtime, but still closed in negative territory. Iron ore giants BHP, Rio Tinto and Fortescue dropped 1.4 per cent, 1.1 per cent and 0.4 per cent, respectively. Gold miner Newmont was down 0.4 per cent.
The energy sector also declined. Petroleum company Woodside Energy dropped by 2.6 per cent, while Santos shed 1.5 per cent. The price of oil posted its biggest monthly decline since 2021 this month, as signs that the Saudi-led OPEC+ alliance might be entering a prolonged period of higher production added to concerns the global trade war will squash demand.
West Texas Intermediate traded about $US58 a barrel after dropping 3.7 per cent on Wednesday, while the most-active Brent contract settled near $US61.
Shares in Judo Bank plunged 16.8 per cent, after the company said it would not meet previous guidance on loan growth, citing various factors including “heightened volatility in the operating environment”.
“Growth is expected to be lower than guidance provided at the 1H25 result, given market uncertainty impacting customers, the slower initial ramp up of warehouse lending, and balancing growth and economics,” the company said.
The lowdown
Tony Sycamore, market analyst at IG, said that the local bourse could expect more losses in the seasonally weak month of May.
“As a guide, we typically expect to see a pullback of 3-5 per cent in May, which would take the local bourse back towards the lows of March – [the] 7730 [points] area,” he said.
“The quiet start to May comes despite Nasdaq equity futures adding 1.4 per cent following solid earnings reports from Microsoft and Meta after the close of the US market. The calm on the ASX200 is hardly surprising, given the stomach-churning roller-coaster ride it endured during April.”
Overseas, US shares on Wednesday began trading with a thud after a report suggested the world’s largest economy may have shrunk at the start of the year. But the big losses soon evaporated in the latest bit of manic trading on Wall Street amid uncertainty about what damage the trade war will do.
Much like its wild month of April, a scary Wednesday for Wall Street found a gentler ending as US shares stormed back from steep early losses to continue their manic swings. The S&P 500 ended 0.1 per cent higher, extending its winning streak to a seventh day. The Dow Jones Industrial Average added 0.3 per cent, while the Nasdaq composite edged down 0.1 per cent.
Investors had been on track for much worse losses, with the S&P 500 down as much as 2.3 per cent in early trade, after the report on the US economy showed a sharp turnaround from the economy’s solid growth at the end of last year. Importers rushed to bring products into the country before tariffs could raise their prices, which helped put a drag on the country’s overall gross domestic product.
Such data raises the threat of a worst-case scenario called “stagflation,” one in which the economy stagnates, yet inflation remains high. Economists fear it because the Federal Reserve has no good tools to fix both problems at the same time. If the Fed were to try to help one by adjusting interest rates, it would most likely make the other problem worse.
Investors got some better news later in the morning when a report said the measure of inflation that the Federal Reserve prefers to use slowed in March. Inflation decelerated to 2.3 per cent, closer to the Fed’s goal of 2 per cent, from February’s reading of 2.7 per cent. Stocks more than halved their losses after that report.
Still, much of Wednesday’s economic data added to worries that Trump’s trade war might drag the US economy into a recession. The president’s on-again-off-again rollout of tariffs has already created deep uncertainty about what’s to come, which could cause damage by itself.
‘I’m not taking a credit or discredit for the stock market. I’m just saying we inherited a mess.’
Donald Trump
“I’m not taking a credit or discredit for the stockmarket,” Trump said on Wednesday. “I’m just saying we inherited a mess.”
The uncertainty created severe and historic swings in financial markets, from stocks to bonds to the value of the US dollar, that battered investors through April. The S&P 500 at one point dropped nearly 20 per cent below its all-time high set earlier this year, with scary headlines at one point warning of the worst April since the Great Depression.
But the uncertainty has been two-sided, and hopes that Trump may relent on some of his tariffs and reach trade deals with other countries helped the S&P 500 claw back much of its losses.
“This month was like a classic V-shaped roller-coaster,” said Scott Ladner, chief investment officer at Horizon Investments.
Starbucks sank 5.7 per cent after the coffee chain fell short of analysts’ forecasts for revenue and profit in the latest quarter.Credit: AP
However, some stronger-than-expected profit reports from big US companies have helped support the market, and Seagate Technology jumped 11.6 per cent for one of Wednesday’s biggest gains after the maker of data storage joined the parade.
But potentially discouraging trends within the artificial intelligence industry helped offset such gains for storage makers. AI stocks have been pulling back sharply on worries that their prices shot too high in prior years, when a frenzy around the industry drove them to breathtaking heights.
Super Micro Computer warned that some customers delayed purchases in the latest quarter, which caused the maker of servers used in AI and other computing to slash its forecast for sales and profit. Its stock tumbled 11.5 per cent for the largest loss in the S&P 500.
Starbucks sank 5.7 per cent after the coffee chain fell short of analysts’ forecasts for revenue and profit in the latest quarter.
There was better corporate news after the close of trading. Microsoft said its cloud computing and artificial intelligence business boosted profits by 18 per cent to $US25.8 billion in the March quarter, beating Wall Street expectations – a dose of relief for investors during a turbulent time for the tech sector and US economy. Its shares jumped 6.2 per cent in after-hours trading.
Instagram and Facebook parent Meta Platforms also posted better-than-expected results after the bell, thanks to strong advertising revenue on its social media platforms. The company earned $US16.64 billion in the January to March period, up 35 per cent from the same period a year earlier. Meta’s stock climbed 5.2 per cent in extended trading after the results came out.
In the bond market, Treasury yields held relatively steady. The yield on the 10-year Treasury eased to 4.18 per cent from 4.19 per cent late on Tuesday.
In other international shremarkets, indexes finished mixed across Europe and Asia.
Tweet of the Day
Quote of the day
With a metaphorical gun to his head, Bezos backed down.
That’s Elizabeth Knight on Trump’s recent call with Amazon founder Jeff Bezos. You can read more of her column here.
With AP, Bloomberg
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