Market Wraps

Morning Wrap: ASX 200 to rise, Warren Buffett sells another US$20bn in stocks, Westpac announces $1bn buyback

Mon 06 May 24, 8:23am (AEST)

ASX 200 futures are trading 52 points lower, down -0.68% as of 8:30 am AEST.

Strap yourselves in because it's another big week in markets. The latest RBA monetary policy decision will be handed down on Tuesday and everyone will be eyeing for a subtle change in language which could lead to more rate hikes.

Over the weekend, the latest US jobs report suggested some loosening was starting to show - just 175,000 jobs were added last month (which was well short of economist expectations) and the unemployment rate ticked up. But jobs reports - be it in Australia or the US - are infamously noisy so take one month's numbers with a grain of salt.

Warren Buffett has also been making headlines too - selling even more stock and boosting Berkshire Hathaway's cash balance to US$189 billion. (More on this in the headlines)

On the home front, the shares of Westpac will be in focus after it announced a $1 billion buyback and a special dividend despite a 16% decrease in net profit.

Let's dive in.

Overnight Summary

Mon 13 May 24, 8:30am (AEST)

Name Value % Chg
Major Indices
S&P 500 5,223 +1.85%
Dow Jones 39,513 +2.16%
NASDAQ Comp 16,341 +1.14%
Russell 2000 2,060 +1.18%
Country Indices
Canada 22,309 +1.65%
China 3,155 +1.60%
Germany 18,773 +0.46%
Hong Kong 18,964 +2.64%
India 72,664 -1.64%
Japan 38,229 -0.12%
United Kingdom 8,434 +3.20%
Name Value % Chg
Commodities (USD)
Gold 2,375.0 +1.48%
Iron Ore 116.93 -0.03%
Copper 4.6625 +1.69%
WTI Oil 78.26 -1.26%
Currency
AUD/USD 0.6602 -0.26%
Cryptocurrency
Bitcoin (AUD) 92,733 +0.54%
Ethereum (AUD) 4,434 +0.35%
Miscellaneous
US 10 Yr T-bond 4.504 +0.09%
VIX 12.55 -6.97%

US Sectors

Mon 13 May 24, 8:30am (AEST)

SECTOR % CHG
Utilities +4.03%
Financials +3.07%
Materials +2.58%
Consumer Staples +2.30%
Industrials +2.30%
Real Estate +2.03%
SECTOR % CHG
Communication Services +2.02%
Health Care +1.94%
Information Technology +1.41%
Energy +1.36%
Consumer Discretionary +0.16%

S&P 500 SESSION CHART

SPX Friday 3 May 2024
Bad news in the economy is seen as good news for stocks. (Source: TradingView)

OVERNIGHT MARKETS

  • Dow closes higher by more than 400 points as April jobs report bolsters Fed rate cut hopes

  • European markets close higher; French banks gain on profit beats as Novo Nordisk slides

  • 10-year Treasury yield briefly dives below 4.5% as unemployment rate rises to 3.9%

  • Oil prices fall, head for steepest weekly drop in three months

  • Gold resumes retreat despite soft jobs report as traders book profits

  • Investors continue to prefer passive over active funds

INTERNATIONAL STOCKS

  • Berkshire Hathaway's operating profit increased 39% y/y to just over $11.2B, cash pile climbed to record $189B

  • Berkshire Hathaway trimmed Apple stake for second straight quarter; Buffett suggested sale was for tax reasons and expects it to remain Berkshire's largest holding

  • Buffett says Berkshire sold all of its stake in Paramount at a loss and blames himself for the decision

  • Buffett says designated successor Greg Abel will have final word on Berkshire's investing decisions when he is gone

  • Just 18% of S&P companies that have provided guidance have beat consensus expectations

  • Tesla decision to pull back on buildout of electric chargers across US raises uncertainty about how fast other charging companies can address the shortage

  • Google and Justice Dept. wrapped up closing arguments in government's antitrust case last Friday; more federal cases testing big tech's dominance on the way

  • DoJ to decide by 28-May about whether Boeing violated agreement protecting it from criminal prosecution

CENTRAL BANKS

  • Fed's Goolsbee wants central bank to provide economic projections behind each dot in SEP

  • European banks rallying on balance sheet repair, cost cutting, higher rates, capital returns

ECONOMY

  • Consumers pushing back against high food costs, forcing companies to ramp up value proposition

  • Yuan weakness providing big tailwind for China exports

  • China has been a big factor behind gold rally as investors there see few better alternatives

ASX TODAY

  • Keep an eye on Westpac shares following its first-half result. Net profit and revenues declined at the bank but return on equity increased by 40bps half-over-half. They've also declared a 75 cent per share interim dividend and a 15 cent per share special dividend - both beat the expectations of the brokers we wrote about in our Bank Earnings preview last week.

  • Shares in dual-listed Spark New Zealand will be in focus after the company reduced its earnings guidance for the full year by some NZ$50 million due to weaker demand in the normally sticky government and enterprise markets.

Industry ETFs

Mon 13 May 24, 8:30am (AEST)

Name Value % Chg
Commodities
Copper Miners 47.98 +0.15%
Gold Miners 35.25 -0.31%
Silver 25.77 -0.35%
Steel 71.1922 -0.57%
Strategic Metals 54.57 -1.21%
Uranium 31.22 -1.89%
Lithium & Battery Tech 44.94 -3.27%
Industrials
Agriculture 24.67 +1.11%
Construction 72.88 +0.59%
Global Jets 20.63 -0.05%
Aerospace & Defense 135.1 -0.19%
Healthcare
Cannabis 5.15 +0.78%
Biotechnology 133.4 -0.01%
Name Value % Chg
Cryptocurrency
Bitcoin 24.64 -2.84%
Renewables
Hydrogen 5.49 -1.96%
CleanTech 8.82 -2.33%
Solar 42.06 -2.64%
Technology
Semiconductor 220.24 +0.98%
Video Games/eSports 63.27 +0.32%
Cybersecurity 28.77 +0.28%
Robotics & AI 31.27 -0.22%
Cloud Computing 19.85 -0.35%
FinTech 25.66 -0.77%
Sports Betting/Gaming 17.391 -0.78%
E-commerce 24.24 -0.86%
Electric Vehicles 24.02 -1.11%

 

Key Events

Companies trading ex-dividend: 

  • Monday 6 May: Link Administrative Holdings (LNK) - $0.16\

  • Wednesday 8 May: Resmed (RMD) - $0.052

  • Thursday 9 May: Future Generation Australia (FGX) $0.034, United Overseas Australia $0.02

Economic calendar (AEST):

  • 11:00am – AUD – MI inflation gauge, NZD – ANZ commodity prices

  • 11:30am – AIUD – ANZ job advertisements

  • 11:45am – CNY – Caixin Services PMI

This Morning Wrap was written by Hans Lee and Chris Conway.

Written By

Hans Lee

Senior Editor

Hans is one of the Senior Editors at Livewire Markets and Market Index. He created Signal or Noise and leads the team's coverage of the global economy and fixed income markets.

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