News
Global Market Report - 27 August
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Australia
Australian shares are set to open lower as the US market slumped on the news of a terror attack at Kabul airport and three of the Federal Reserve’s hawks urged policy makers to speed up tapering.
Australia's S&P/ASX 200 is poised to slip lower at the start of the week's final trading session, amid a negative lead from the U.S. and lower oil prices. ASX futures are down by 0.1%, suggesting the benchmark could add to Thursday's 0.5% fall.
Ahead of the open, Wesfarmers announced a A$2.27 billion capital distribution, NEXTDC beat its FY earnings guidance, Lynas reported a record FY profit, and Bega Cheese more than trebled its FY profit.
Wall Street has lost ground, ending a streak of all-time closing highs on concerns over developments in Afghanistan, while fears of a potential shift in US Federal Reserve policy prompted a broad but shallow sell-off the day before the Jackson Hole Symposium.
All three major US stock indexes ended the session modestly lower on Thursday, with the S&P and the Nasdaq notching their first down day in six.
The Dow Jones Industrial Average fell 191.2 points, or 0.54 per cent, to 35,214.3, the S&P 500 lost 26.27 points, or 0.58 per cent, to 4,469.92 and the Nasdaq Composite dropped 96.88 points, or 0.64 per cent, to 14,944.98.
Locally, some favourite stocks of 'mum and dad' investors took a beating yesterday while the ASX closed lower ahead of a key meeting of US Federal Reserve officials.
Artificial intelligence vendor Appen fell heavily as did A2 Milk after issuing earnings reports, while investors preferred the outlook for Qantas and Woolworths.
Appen shares lost more than 21 per cent after first-half earnings and profit fell. The company also lowered its full-year earnings forecast.
A2 Milk was lower by more than 11 per cent after revealing full-year sales were down. Shareholders will not receive a final dividend.
Qantas airline posted a full-year net loss of $1.73 billion due to the virus.
Yet a better balance sheet and boss Alan Joyce's claim that international travel could be possible by Christmas helped shares climb 3.49 per cent.
The ASX losses ended three consecutive days of gains. Materials, utilities and technology shares had the biggest drops.
The benchmark S&P/ASX200 index closed lower by 40.7 points, or 0.54 per cent, to 7491.2.
The All Ordinaries closed down 39.2 points, or 0.5 per cent, to 7770.4.
On Friday, investors will gain more idea of the effect coronavirus lockdowns in NSW and Victoria have had on retail spending.
The Australian Bureau of Statistics will release retail trade figures for July. Economists forecast a two per cent decline.
Woolworths has experienced the impact at Big W stores. The retail giant revealed Big W sales have dropped more than 15 per cent in FY22 due to virus restrictions.
The news came as Woolworths delivered a $2 billion off-market share buy-back from full-year profit.
Profit rose from panic buying and investors will receive an improved final dividend of 55 cents per share. Shares were up 0.42 per cent to $40.99.
In the other heavyweight category, banking, results were mixed. The Commonwealth gained 0.67 per cent to $100.99. The others of the big four lost less than one per cent.
Shares going ex-dividend included Coles, JB Hi-Fi, gold miner Newcrest and property advertising group REA.
Asia
Europe
North America
Wall Street has lost ground, ending a streak of all-time closing highs on concerns over developments in Afghanistan, while fears of a potential shift in US Federal Reserve policy prompted a broad but shallow sell-off the day before the Jackson Hole Symposium.
All three major US stock indexes ended the session modestly lower on Thursday, with the S&P and the Nasdaq notching their first down day in six.
The sell-off firmed after hawkish commentary from Dallas Fed President Robert Kaplan and a blast outside the Kabul airport in Afghanistan helped strengthen the risk-off sentiment.
Kaplan, who is not currently a voting member of the Federal Open Markets Committee, said he believes the progress of economic recovery warrants tapering of the Fed's asset purchases to commence in October or shortly thereafter.
Kaplan's remarks followed earlier comments from the St Louis Fed President James Bullard, who said that the central bank is "coalescing" around a plan to begin tapering process.
"(Kaplan's statements) caused a little confusion about the taper timeline, but in my opinion the equity markets are focused on geopolitical issues," said Megan Horneman, director of portfolio strategy at Verdence Capital Advisors in Hunt Valley, Maryland. "There's a flight to safety during geopolitical tensions."
"I am surprised the market hasn't fallen more, given the fear that it could take focus away from (US President Joe Biden's) domestic agenda," Horneman added.
The economy grew at a slightly faster pace than originally reported in the second quarter, fully recovering its losses from the most abrupt downturn in US history, according to the Commerce Department. But jobless claims, though still on a downward trajectory, ticked higher last week.
The data did little to move the needle with respect to expectations that the Fed is unlikely tip its hand regarding the taper timeline when Chairman Jerome Powell unmutes and delivers his speech at Friday's virtual Jackson Hole Symposium.
"We're going to see a lot of market participants analyse every word (Powell) uses, but at the end of the day, they will begin tapering," Horneman said. "I'm more concerned about the speed at which they taper. What are they going to start with? That will give us a clearer indication as whether they're getting more hawkish."
Discount retailers Dollar General Corp and Dollar Tree Inc tumbled after warning higher transportation costs will hurt their bottom lines.
Coty Inc jumped after the cosmetics firm said it expects to post full-year sales growth for the first time in three years.
Salesforce.com Inc hiked its earnings forecast as the shift to a hybrid work model is expected to fuel strong demand, sending its shares higher.
NetApp Inc surged as brokerages raised their price targets in the wake of the cloud computing firm's better-than-expected 2022 earnings outlook.
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