9 July Markets at a glance
Around the grounds
- ASX tracks higher, miners & financials lead
- AUD steady, Euro equalises
- US inflation data & earnings on tap
- Powell fronts the hill
- Nikkei 225 scales fresh record high on the Fed effect
The local market is gaining ground in a broad-based rally, recovering nearly all of yesterday’s losses. Every sector of the ASX is in the green, with telecommunications leading the charge, up over 1.5%. Financials are also higher, alongside the heavyweight mining sector.
Traders are digesting a trio of business and consumer surveys with NAB’s latest business survey showing conditions have continued to ease in June, while firms’ confidence is on the rise.
Focus for global investors now shifts to key US inflation data later in the week for any cues on when the FOMC will cut interest rates this.
In the news
Stock specific, Australian listed shares of Auto parts retailer Bapcor (BAP) are under pressure, on track for their worst session since early May after the company rejected the AU$1.83 billion buyout bid from private equity firm Bain Capital, saying it doesn’t represent fair value. It comes as the struggling automotive retailer issued a profit warning for the second half of the year, saying net profit after tax would be hit by impairment charges in the retail business.
On the flip side, Telstra (TLS) shares are higher, at one stage touching a three-month peak as the company says it will raise prices for most of its mobile plans in August by between AU$2 and AU$4 per month. The stock is down nearly 8% this year as of last close.
In industrials, Droneshield (DRO) shares have surged to a fresh all-time high, taking the stock up a whopping 478% for the year as the war in Ukraine highlights how modern conflicts will be increasingly fought by drones.
Finally, Toys”R”Us (TOY) shares have surged coming out of a trading halt, rising as much as 26% after the toys and lifestyle products retailer secured up to AU$4 million worth of funding to launch its House of Brands growth strategy. The portfolio includes five brands offering a range of baby and children’s products as well as products for adults. The stock is down around 1% YTD, as of last close.
Going global
Getting to the broader Asian session, Japan’s Nikkei 225 has hit yet another record high, driven by demand in chip-related stocks tracking peers on Wall Street as investors await testimony from FOMC Chair Jerome Powell for clues on the central banks path of policy.
Markets are pricing in a more than 75% chance of a rate cut of at least 25 basis points by September, according to the CME FedWatch Tool.
To futures, Europe is set for a lower open while the US is expected to open firmer after a relatively muted start to the trading week.
In forex markets, the US dollar has steadied near four-week lows, while the euro holds its ground after sharp swings yesterday as investors come to terms with a hung parliament in France. Sterling is flat while the yen remains steady around 160 per dollar, recovering from last week’s nearly 38 year trough of 161.96.
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