Important Information:

Please be advised that there is a global technology incident impacting NAB and other companies which is preventing clients from being able to place orders. We apologise for the inconvenience caused.

9 July Markets at a glance

The ASX is higher as miners and financials drive a broad-based rally. Bapcor issues profit warning appoints new CEO & rejects Bain Capitals AU$1.83 billion bid and Telstra shares rise despite raising prices on its mobile plans. Globally, Asian equities get a bid on hopes of a cautiously dovish Fed with Tokyo’s Nikkei 225 touching fresh record highs.

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.

 

All prices and analysis at 9 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.


About the Author
nabtrade

Stay informed with the latest ASX and international market updates on nabtrade, NAB’s online investing platform, which gives you access to a world of investment opportunities. With one account you can invest directly in a range of products including domestic and international shares, exchange traded funds, bonds and more.