Markets at a glance 8 August
Around the grounds
Australian shares are again under pressure as mining and energy stocks lose ground and traders digest company reports as earnings season kicks into gear.
The mining sub-index is down over 2%, tracking a fall in iron ore prices over night, with energy shares on the back foot despite a slightly higher oil price. Real estate stocks have slipped amid expectations of higher-for-longer interest rates, with Mirvac Group (MGR) the biggest drag in the sector, set to record its biggest-one day drop in more than four years after disappointing numbers. Rounding it out across the bourse, gold shares have dropped over 3% though spot gold is up a tick in early trade.
On the path of policy, RBA Governor Michele Bullock has reiterated the central bank will not hesitate to raise rates if needed to control inflation, reinforcing the RBA’s hawkish stance as the pace of underlying inflation remains sticky.
Markets are still pricing in a 46% chance of a rate cut in November, with a first easing in December nearly fully priced in.
In the news
Local reporting season is starting to pick up steam, AMP Ltd (AMP) shares have surged to touch an 11-month high as first half profit rose and beat market estimates, thanks to underlying strength in its investment platforms and resilient cost savings. It’s banking unit however posted a near 39% drop in half year profit, dented by falling margins.
Shareholders will get an interim dividend of 2 Australian cents per share.
As mentioned, Mirvac (MGR) shares have slumped to touch a 4 year low after the Australian property dealer reported a wider annual loss and flagged lower earnings estimates for the fiscal year ahead.
A similar story for Australian listed shares of Myer (MYR) down at one stage over 8% in today’s trade after the retailer lowered its full year profit forecasts thanks to what it calls a ‘challenging consumer and trading environment’ coupled with store closures and inflation pressures.
The stock is up 40% YTD, as of last close.
Finally, Qantas (QAN) has taken the scissors to former CEO Alan Joyce’s fiscal 2023 pay through his long-and-short-term incentives, as the embattled airline attempts to restore trust among investors.
Joyce, who retired in September 2023, took home over AU$21 million in the 2023 financial year, however his pay will now be reduced by AU$9.26 million, with the company also flagging it will trim short-term incentives for affected current and former senior executives by 33%.
Qantas has been hampered by both legal and regulatory actions, the most recent of which saw it agree to pay AU$120 million to settle a regulator lawsuit in May over the sale of thousands of tickets on already cancelled flights.
Going global
Finishing it off on the global stage, tech shares are leading a selloff in equity markets around the Asian region, while the yen and U.S. bond markets have rebounded as investors struggle to find direction in what’s been quite a wild week for equity markets.
Tokyo’s Nikkei 225 was las down around 1%, recouping some of the 2.5% slide earlier in the session. Taiwan’s tech heavy benchmark is also lower, and the Hang Seng is down around 1%. MSCI’s broadest index of Asia-pacific shares outside Japan is down around 0.8%.
To the currency trades, the yen has firmed after a sharp drop yesterday as sentiment remains fragile and markets continue to weigh the unwinding of popular carry trades. The euro is steady while sterling is hovering close to a one month low touched earlier in the week.
Sticking with the carry trades, the Swiss France is slightly stronger after an over 1% yesterday, the Australian unit it a touch higher, while the kiwi is steady.
Ahead of the US session, futures are mixed but trending to the weak side, with S&P 500futures down 0.24$ while Nasdaq futures are off around 0.14%.
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