Welcome to your five-minute recap of the trading day, and how experts saw it.
The Australian sharemarket had its strongest trading session since last Friday, with utilities and tech stocks leading the gains.
The S&P/ASX 200 lifted 23.4 points, or 0.31 per cent, to 7639.2 at the close. Five out of 11 sectors were trading in the green, with energy (down 0.52 per cent) and consumer staples (down 0.45 per cent) the weakest performers.
AGL surged 10.3 per cent after the energy and gas retailer reported a half-year underlying net profit of $399 million and upgraded its full-year earnings guidance towards the top end of its forecasts. It marks a sharp turnaround from its $1.26 billion loss last financial year.
Shares in the company hit an intraday high of $9.03 per cent about 10.30am before paring back some of those early gains to finish at $8.80. It helped make the utilities sector (up 0.97 per cent at the close) the best performer during the day, but tech stocks (up 1.18 per cent) ended at the top.
The tech sector was buoyed by gains broadly across the board, with WiseTech leading the pack after its shares climbed 3.13 per cent.
Meridian Energy (up 5.74 per cent), Cochlear (up 4.44 per cent) and Worley (up 4.23 per cent) were among the best performing mega-cap stocks.
The big four banks all rallied, with shares in CBA up 1.15 per cent, NAB up 1.03 per cent, Westpac up 0.58 per cent and ANZ up 0.84 per cent.
Energy (down 0.52 per cent) was the weakest performing sector, dragged down by Woodside (down 0.4 per cent), Santos (down 0.94 per cent) and Whitehaven Coal (down 1.68 per cent).
REA Group recorded the greatest declines among large-cap stocks after its shares slumped 4.18 per cent, followed by EBOS Group (down 3.67 per cent) and BlueScope Steel (down 2.38 per cent).
Other sectors in the red include consumer staples (down 0.45 per cent) and communication services (down 0.33 per cent).
AMP chief economist Shane Oliver said while only a handful of local companies had posted their half-yearly earnings, investors had so far reacted positively to the reporting season.
“Even though expectations for rate cuts are getting pushed out, the market is not too worried because the US and global economies are doing OK,” Oliver said.
“Financials were the biggest contributor to the rally. There’s ongoing enthusiasm regarding CBA and optimism about earnings results next week.”
Over on Wall Street, the S&P 500 closed 0.8 per cent higher at 4995, having moved as high as a fraction of a point away from its latest milestone. The Dow Jones added 0.4 per cent and the Nasdaq composite was up 1 per cent.
A relatively calm day in the bond market helped keep things smooth for the stock market, despite some concerns about investors’ ability to digest a $US42 trillion ($64.4 trillion) auction of 10-year Treasurys by the US government.
Underneath the surface, though, were still some very sharp moves. New York Community Bancorp went from an initial gain to a steep loss of 14 per cent and back to a gain of 6.7 per cent. It’s the latest dizzying swing for the bank, which is still down nearly 60 per cent since rattling investors across the industry last week with a surprise loss.
It’s struggling with challenges related to its acquisition of Signature Bank, which was one of the banks that collapsed in last year’s mini-crisis for the industry. But New York Community Bancorp is also feeling pain from a problem dogging banks worldwide: weakness in commercial real estate.
Moody’s downgraded the bank’s credit rating late Wednesday to “junk” status from the lowest tier of investment-grade. Analysts also said they were concerned about the departures of key risk and audit executives for the bank.
New York Community Bancorp’s stock then went on a wild ride in off-hours trading, sinking and then rising after the bank said it had increased its deposits and gave details about how much cash it has on hand.
Stocks of other regional US banks have been caught up in the drama, to a lesser degree, which has brought back uncomfortable memories of last year’s banking crisis. The KBW Nasdaq Regional Banking index swung from a loss during the day to a gain of 0.1 per cent.
UBS analyst Brody Preston said New York Community Bancorp’s latest quarterly loss and dividend cut are due to problems related specifically to it, and “are not necessarily a proverbial canary in the coal mine for other banks in the space.” But attention is likely to remain on potential losses for banks tied to commercial real estate, particularly after Treasury Secretary Janet Yellen recently highlighted them as a concern.
Elsewhere on Wall Street, Chipotle Mexican Grill rose 7.2 per cent after reporting stronger profit and revenue for the latest quarter than analysts expected. Its restaurants sold more meals to customers than they did a year earlier.
Ford Motor climbed 6.1 per cent following its better-than-expected results, while Enphase Energy soared 16.9 per cent despite falling just shy of forecasts. Investors are hopeful that weakness in demand for the supplier of solar and battery systems is nearing a bottom.
They helped offset a 9.7 per cent drop for VF Corp., the company behind Vans, The North Face and other brands. It reported weaker results than analysts expected.
Snap tumbled 35.2 per cent after its fourth-quarter revenue fell short of analysts’ expectations. The company behind Snapchat also gave a tepid forecast for 2024 after saying on Monday that it was laying off 10 per cent of its workforce.
In the bond market, Treasury yields were holding relatively steady. The yield on the 10-year Treasury edged up to 4.10 per cent from 4.09 per cent late on Tuesday. It’s been on a jagged run recently as signals of a remarkably resilient economy force traders to push back forecasts for when the Federal Reserve may cut interest rates.
Tweet of the day
Quote of the day
“We can never guarantee things like this aren’t going to happen, but we heard loud and clear from consumers that they want accurate and timely information, so they can make decisions about how to run their life without access to phone and internet,” Telecommunications Ombudsman Cynthia Gebert said, revealing complaints to her office jumped 13.4 per cent in the direct aftermath of the mass Optus outage.
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Source: Thanks smh.com