16 July Markets at a glance
Around the grounds
Australian investors are taking a breather, with shares muted in today’s trade as the bellwether miners slip, offsetting gains in financials.
The mining sub-index is down over 1% as copper prices eased amid weak demand prospects in top consumer China. Energy is also lower on the back of a modestly lower oil prices, again on worries of slowing China demand. Mining stocks are down 11.3% this year as of last close.
Bucking the trend, rate-sensitive financials. The sub-index is tracking higher as global investors digest more comments from Fed Chair Jerome Powell overnight who reiterated inflation readings over the second quarter were “adding somewhat to confidence” The pace of price increases is returning to the FOMC’s target.
Elsewhere, gold stocks are higher, tracking a rise in bullion prices, while the NZ50 is flat as investors sit on the sidelines ahead of key inflation data due later in the week for any cues on the RBNZ’s next move.
In the news
Shares of mining giant Rio Tinto (RIO) are under pressure, at one stage touching its lowest level since mid-March after second-quarter iron ore shipments missed expectations, due to production impacts form a train derailment in May. Looking ahead, the company has lowered its full year alumina production forecasts reflection what reduced operation rates at its Gladstone facility.
The stock is down nearly 12% this year, as of last close.
On the flipside shares of Australian listed HUB24 (HUB) have soared to a record high after the company reported total funds under administration reached AU$104.7 billion as at June 30, marking a 30% spike on PCP. Quarterly platform net inflows also surged, up 138% at AU$5 billion. HUB stock is up around 29% year to date as of last close.
Australian listed shares of IGO (IGO) are in focus after the company warned it would record a non-cash impairment charge against its nickel exploration assets for fiscal 2024, though added the move won’t impact the company’s operating profit for the year. The battery metal producer is undergoing a strategic review in an attempt to revaluate its resources as it continues to reel from falling prices of key commodities.
Just last week mining giant BHP Group (BHP) suspended its Western Australia nickel operations, as global nickel producers grapple with a plunge in prices and oversupply in the market.
IGO shares are down around 34% YTD, as of last close.
Finally, shares of CAR Group (CAR) have touched a one month high as Citi upgrades the stock to ‘buy’ from ‘neutral’, raising the price target to AU$39.80 from AU$34.70 a share. The broker says while another interest rate hike and weakening demand are risks to Australian businesses Carsales has a very strong position in the market which is expected to deliver strong growth even in what Citi calls a “tough environment”.
The stock is up nearly 13% YTD, as of last close.
Going global
Let’s get to the global stage, in currencies the US dollar is hovering around five-week lows but has found some key support as market sentiment remains upbeat after comments from FOMC Chair Powell overnight continued to bolster bets of a September rate cut. Markets are now seeing 68 basis points of easing this year, with a cut in September all but fully priced in, according to the CME FedWatch Tool.
Elsewhere, the euro was a shade lower, sterling is tracking relatively flat while the yen has lost ground after touching a one-month high against the dollar on Monday as intervention questions remain.
In crypto, bitcoin has marched higher to trade above the US$65,000 mark, nearing a one-month high. Digital coins, along side shares of companies that could benefit from a Donald Trump presidency have surged after a failed assassination attempt on the former President boosted expectations he could return to the White House after the November election.
And US futures have come back online, with the ‘trump trade’ continuing to drive momentum, with all three of majors expected to open in positive territory.
All prices and analysis at 16 July 2024. The content is distributed by WealthHub Securities Limited (WSL) (ABN 83 089 718 249)(AFSL No. 230704). WSL is a Market Participant under the ASIC Market Integrity Rules and a wholly owned subsidiary of National Australia Bank Limited (ABN 12 004 044 937)(AFSL No. 230686) (NAB). NAB doesn’t guarantee its subsidiaries’ obligations or performance, or the products or services its subsidiaries offer. This material is intended to provide general advice only. It has been prepared without having regard to or taking into account any particular investor’s objectives, financial situation and/or needs. All investors should therefore consider the appropriateness of the advice, in light of their own objectives, financial situation and/or needs, before acting on the advice. Past performance is not a reliable indicator of future performance. Any comments, suggestions or views presented do not reflect the views of WSL and/or NAB. Subject to any terms implied by law and which cannot be excluded, neither WSL nor NAB shall be liable for any errors, omissions, defects or misrepresentations in the information or general advice including any third party sourced data (including by reasons of negligence, negligent misstatement or otherwise) or for any loss or damage (whether direct or indirect) suffered by persons who use or rely on the general advice or information. If any law prohibits the exclusion of such liability, WSL and NAB limit its liability to the re-supply of the information, provided that such limitation is permitted by law and is fair and reasonable. For more information, please click here.