1 July Markets at a glance
Leah Gibbons | nabtrade
Around the grounds
- ASX falls tracking peers on Wall Street
- Information sub-index on track for worst day since May 17
- RBA meeting minutes on tap
- Far-right takes pole position in first round of France elections
- Asian equities falter after rising 7% in H1
The S&P/ASX 200 has started the new fiscal year in the doldrums, tracking falls on Wall Street as traders digested an in-line PCE print.
The sell button is being hit across the board with interest-rate sensitive financial stocks among the top laggards.
Tech stocks are also under pressure, down nearly 2%, tracking peers on Wall Street as investors digested in-line inflation data and weighed political uncertainty in the US after the first U.S. presidential debate.
The broader sub-index though is still up by nearly 30% as of last close.
Energy is flat, while healthcare and information stocks have dropped.
The miners though are bucking the broader trend to trade higher, boosted by an uptick in global iron ore prices as demand recovers in China.
Bigger picture, the June-quarter report by the Department of Industry forecasts a 10% drop in energy export earnings to AU$417 billion for the 2023/24 fiscal year. While global economic growth has remained soft, thanks to restrictive monetary policies, economic indicators suggest the world economy may have picked up modestly in the first half of this year, which should support commodity prices going forward, the report said.
Turning to the property space, house prices continue to march higher, up for a seventeenth straight month in June as tight supply outweighed demand-side pressures of high interest rates.
CoreLogic’s latest report showed national home prices edged up 0.7% in the month, taking prices up 8% on a year earlier.
In the news
Australian listed shares of EML Payments (EML) have surged set for their best gain since early June as the company names Ron Hynes as its managing director and group CEO. Hynes has previously held executive positions with Mastercard (NYSE: MA) and JPMorgan (NYSE: JPM).
The stock is up nearly 18% this year as of last close.
Shares of real estate firm LendLease Group (LLC) are higher as the company says the AU$480 million sale of its U.S. military housing business is set to boos operating profit by over AU$100 million in the first half of fiscal 2025.
Stock is down nearly 28% this year as of last close.
Finally in the broker space, Citi has upgraded Mirvac Group (MGR) to ‘buy’ as the broker says the company’s 66% stake sale in its 55 Pitt Street Sydney office is “positive”. Stock is down around 10% this year as of last close.
Going global
Around the globe its all eyes on the French elections, as exit polls showed Marine Le Pen’s far-right party takes pole position in the first round of the country’s snap election.
The upswing in the euro sent the greenback lower against a basket of currencies though the USD was already under pressure after Friday’s PCE print cooled in May, cementing expectations the FOMC will begin cutting interest rates this year.
Fed futures are pricing in a 63% chance of a cut in September, compared to 50/50 split a month ago, according to the CME FedWatch Tool.
The yen remains in the spotlight, down over 12% so far this year with markets remaining on high alert for any intervention from Japanese authorities to prop up the currency.
On Asian equities, the MSCI's broadest index of Asia-Pacific shares outside Japan is lower after rising 7% so far in 2024.
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