By Millie Muroi
Consumer staples and energy companies weighed the Australian sharemarket on Tuesday, after data showed consumer confidence dropped last week, paring back the momentum from a positive close on Wall Street overnight.
The S&P/ASX 200 was down 4.1 points, or 0.06 per cent, to 7111.4 at about 12pm AEST, even as information technology and communication services companies advanced.
Xero (up 4.1 per cent), NEXTDC (up 3 per cent) and WiseTech (up 2.3 per cent) were among the biggest large-cap advancers, bolstering the information technology sector which gained 5.6 per cent.
Lithium miners were also stronger with Allkem (up 3 per cent) among the biggest large-cap advancers after it reported a record profit of $US524.6 million ($817.9 million) and Liontown adding 1.9 per cent.
Telstra (up 2.8 per cent) helped lift the communication services sector which added 1.7 per cent.
Meanwhile, Coles was the biggest large-cap decliner, shedding 5.9 per cent, after delivering net profit just below consensus estimates. It comes after the supermarket giant flagged it was facing $120 million in additional costs and a delay in the construction timelines for its automated warehouses. The consumer staples sector dropped 2.5 per cent, weighed down by Coles and competitor Woolworths (down 3.1 per cent) as consumer confidence decreased by 2.4 percentage points last week according to an ANZ-Roy Morgan survey.
Energy companies (down 1.2 per cent) were also weaker after Brent crude oil prices dropped 0.4 per cent overnight. Santos fell 0.5 per cent and Woodside shed 1.1 per cent despite the latter reporting record profits.
Iron ore giant BHP lost 1.4 per cent after reporting weaker-than-expected profit and dividend results.
Elsewhere, Wall Street held a bit firmer on Monday in New York following a painful three-week losing streak.
The S&P 500 rose 0.7 per cent for its first gain in five days. Rallies for Nvidia, Microsoft and other Big Tech stocks lifted the index even though the majority of stocks within it fell.
The Dow Jones slipped 0.1 per cent and the Nasdaq composite climbed 1.6 per cent.
It was a return to form for Nvidia, Tesla and other market behemoths, which have struggled recently under the weight of rising yields in the bond market. The yield on the 10-year Treasury rose again Monday to touch its highest level since 2007 after briefly climbing above 4.34 per cent.
Higher yields are good for people buying bonds, who get paid more in interest for their investments. But it also makes investors less willing to pay high prices for stocks and other investments that are less steady.
Powell at Jackson Hole
This week’s main economic event is likely to be a speech on Friday by Federal Reserve Chair Jerome Powell. The Jackson Hole, Wyoming, setting for his speech has been the site of major policy announcements in the past by the Fed, and it’s one of the most important events each year for central bankers globally.
The worry is that Powell will dash investors’ hopes that the Fed has already hiked interest rates for the final time and that its next move will be to cut rates early next year.
In the minutes from its last policy meeting in July, the Fed indicated it was unsure about its next move. It said it will make upcoming decisions on rates based on what incoming data say about inflation and the economy.
Another big event for the market will be Nvidia’s profit report scheduled for Wednesday. The chip maker’s stock has flown higher this year, more than tripling on excitement about demand for artificial-intelligence technology.
Nvidia’s report on Wednesday may offer a hint about whether all the furor around it and other AI-related stocks was deserved. It jumped 8.5 per cent Monday. Microsoft, another AI winner, rose 1.7 per cent. They were two of the strongest forces lifting the S&P 500.
Along with them was Tesla, another high-growth stock that’s been hurt recently by the threat of higher rates. It rose 7.3 per cent to recover some of its 11 per cent loss from last week.
Source: Thanks smh.com