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ASX closes 0.7% higher, Qantas brings forward flights

Daily Market Update (49)

ASX breaks losing streak, mining firms, Treasury juiced, travel boost

The S&P/ASX200 (ASX: XJO) managed to break a three-week losing streak to finish 0.6% higher over the five trading days.

It was ultimately driven by a strong Friday session, the market up 0.7%, which benefitted from a strong start to the US earnings season but more importantly, positive economic news in Australia.

On Friday, fund managers Pendal (ASX: PDL) and Platinum (ASX: PTM) were the weakest performance down over 11 and 7% respectively, with competitor Magellan (ASX: MFG) among the leaders, moving 3% higher.

Treasury wine sold off another 5% after management flagged that the closure of bars and restaurants in Australia meant sales were behind schedule; clearly no surprise however traders were seemingly pricing in a more optimistic scenario.

Rio Tinto was the only major miner finishing lower, down 1%, after flagging its third straight miss on export targets.

Qantas (ASX: QAN) jumped 2% after booking an $800 million benefit after selling a parcel of land near its Sydney headquarters to property investor LOGOS.

Across the week it was all about mining, with the materials sector adding 3% and tech not far behind delivering a 1.7% gain as bond yields continue to settle.

Netwealth (ASX: NWL) and Hub 24 (ASX: HUB) were the standouts, both gaining over 20% on record platform inflows, with fund manager Pendal (ASX: PDL) and Redbubble (ASX: RBL) struggling to keep up with inflated expectations.

Strongest week since July, Goldman’s record year, Alcoa reinstates dividend

US markets delivered a second straight week of gains despite continue concerns about inflation and higher bond rates, with the Dow Jones gaining 1.6% and moving back above 35,000 points.

The S&P500 gained 1.8% and the Nasdaq outperformed jumping 2.2% with financials a key contributor to the sustained strength.

Retail sales surprised to the positive moving 0.7% higher in the month and 14% year over year.

The banking sector has opened reporting season with a bang, with Goldman Sachs (NYSE: GS) delivering its best full year revenue result, up 30% on 2020 levels, despite only being nine months in the year.

The consumer business is also performing well with their Apple credit card and neobank division seeing sales growth of 35%.

It was a similar story at JP Morgan (NYSE: JPM) where investment banking profit bounced 52% as the bull market for deals, SPACs, IPOs and everything in between moves to another level.

These reports drove the Dow Jones’ outperformance on Friday, which finished 1.1% higher, beating the S&P 500 and Nasdaq, 0.8 and 0.5% respectively.

Tesla (NYSE: TSLA) also reached a short-term high jumping 3% ahead of next week’s earnings result. 

Pays being green, social security increase, normal isn’t easy

With all the attention turning to the energy crisis engulfing the northern hemisphere as a shortage of oil and gas collide with a boom in demand, Macquarie (ASX: MQG) is quietly positioning itself as a global green warrior.

The group this week hit an all-time high with Morgan Stanley’s analysis suggesting their new division, Green Investment Group, could deliver as much as $2.5 billion in additional revenue by 2050.

Macquarie is no stranger to making money, and whilst many are suggesting today’s energy crisis is set to continue, the group has clearly identified where the world is going whether countries decide to join or not.

For better or worse, Australia appears to be on the way to opening up, with the newly installed NSW Premier growing increasingly aggressive on border openings, quarantine requirements and both domestic and international travel.

As an immigration driven economy, this is an important step for towards a new normal; the risks however remain difficult to balance.

Whilst Sydney siders will be celebrating this week, the transition back to normal won’t be easy, with Redbubble this week highlighted the difficult for pandemic winners to keep up in normal environments.

After breaking the bank to flood the economy with money during the pandemic, the US government has flagged the largest increase in social security payments in 40 years, likely a sign of things to come around the world. 

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