Markets at a glance 7 November

Leah Gibbons | nabtrade

Around the grounds

The Australian share market is flat to negative in today’s trade, as investors continue to digest the impact of a second Trump presidency on global markets and economies. Sector specific, losses in gold stocks are countering gains in energy, while the miners are a touch lower amid weak iron ore futures prices.

On the US election outcome, Australian Prime Minister Anthony Albanese has spoken to US President-elect Donald Trump, saying they discussed trade and investment, security and the AUKUS nuclear submarine deal.

Finally, Reserve Bank of Australia Governor Michele Bullock says it’s hard to judge the inflation implications of the U.S. election at this stage but added policymakers would be watching closely and will respond as necessary.

On the local outlook, Bullock said the central bank has not changed its view on inflation, which is only expected to return to target band in 2026.

Going global

To the global stage, shares around the region have retreated with Tokyo’s Nikkei 225 extending earlier losses to trade over 1% lower. Chinese shares have also declined. It comes as Trump promises to slap a blanket 60% worth of tariffs on all Chinese imports, raising them more if Beijing makes a move to invade the self-governing island of Taiwan.

Analysts have warned that while Trump’s policies could potentially lead to stronger economic growth, the higher tariffs may fan inflation and add costs to U.S. household bills.

Looking ahead, it’s all eyes on the US Federal Reserve interest rate decision, where the expectation is still for a 25 basis point cut to the benchmark, according to the latest CME FedWatch Tool, however traders have now paired back forecasts for how many cuts the US central bank will provide through the middle of next year.

In the news

Getting a quick check in on stocks to watch in today’s trade. National Australia Bank (ASX: NAB) reported an 8% drop in annual cash earnings, largely in line with market expectations, as the lender grapples with intense home-lending competition and escalating deposit costs.

Net interest income fell, while net interest margin – a key gauge of profitability – declined 3 to 1.71%. Shareholders are expected to get a final dividend of AU$0.85 per share, up from the 84 cents a year ago.  

On the US election, NAB CEO Andrew Irvine said while the outcome will likely see a stronger US economy it could also result in interest rates staying higher for longer, impacting the global economy.

Shares Of Breville Group (ASX: BRG) have taken a hit as the home appliances maker says it will aggressively build a U.S. inventory as Donald Trump’s win solidifies risk of higher tariffs on Chinese imports.

Elsewhere, shares of Sigma Healthcare (ASX: SIG) have hit a record high as the company gets the nod of approval from the competition watchdog for an AU$8.8 billion tie-up with Chemist Warehouse. The ACCC has approved the merger saying its unlikely to substantially lessen competition.

SIG shares have more than doubled in value so far this year, up over 150%.

Steadfast Group (ASX: SDF) shares are also on the rise, as the insurance broker says its acquired London-based insurer HW Wood & HWI France in a trans-national deal valued at over 23 million pounds.

The deal is expected to be immediately EPS accretive and says the acquisition will help expand its portfolio in the UK, France & Greece.

Steadfast shares are down 5% YTD, including the current sessions move.

Finally, Australian listed shares of Quickstep (ASX: QHL) has surged the most in 11 years as ASDAM Operations, an entity owned by Aussie private capital manger CPE Capital lobs an AU$287.7 million takeover bid. The offer price of AU$0/40 a share is at a 105% premium to QHL’s last closing price. The stock is up nearly 4% this year, including today’s moves.  

All prices and analysis at 7 November 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.