Markets weaker as UK energy prices cause chaos
US equities closed lower in very quiet Friday trading, ending just off the worst levels.
In Australian this week investors will focus on the June 30 earnings reporting season which hits its busiest week with around 100 major companies due to report covering around 25 per cent of the benchmarks market cap.
These companies included week include including Lendlease, Ansell, Boral, Coles, Nine, Tabcorp, Qantas & Whitehaven Coal to name a few.
Stocks tumbled on Friday as Wall Street’s summer rally faltered and rate hike fears resurfaced, leading the major averages to end the week on a sour note.
The S&P 500 slid 1.29 per cent , while the Dow Jones Industrial Average fell 0.86 per cent to 33,706.74. The Nasdaq Composite dropped 2.01 per cent.
Friday’s halt in Wall Street’s summer rally came as minutes from the Federal Reserve’s July meeting and comments from St. Louis Federal Reserve President James Bullard indicated that the central bank would likely continue hiking rates in the near term, putting a damper on investors’ hopes of a slowdown.
Meanwhile China’s internal troubles with COVID and problems in their property market may have an upside: with lower demand for imported metals, energy, food and capital goods alleviating inflationary pressures in the rest of the world. For the first time in decades, the country’s enormous trade surplus is a boon for workers elsewhere.
Elsewhere on the data front, UK retail sales unexpectedly improved in July, though UK consumer confidence fell to lowest level since records started in 1974. No wonder the fall in consumer confidence as UK natural gas prices rose nearly 96 per cent in the year to July, while electricity prices are up 54 per cent.
Against this real wages in the U.K. fell by an annual 3 per cent in the second quarter of 2022, the sharpest decline on record, as wage increases failed to keep pace with the surging cost of living.
Annual consumer price inflation for gas and electricity in the United Kingdom is forecast to soar to an average of around 80% this year, with the cost of gas for both businesses and consumers are only expected to increase through the colder winter month.
Across the sectors in the US the market was in a defensive mode as consumer discretionary fell against the health care, energy & utilities sectors
Currencies
Dollar extended its big weekly gains on the major crosses. Dollar index was up over 2% for the week
One Australian dollar weakened compared to the US dollar on Friday, buying 68.76 US cents (Fri: 69.18 US cents), 58.16 Pence Sterling, 94.09 Yen and 68.52 Euro cents.
Commodities
Iron ore futures are pointing to a 1.2 per cent gain.
Gold prices slipped for a fifth consecutive session on Friday, in its longest losing run since November last year, as the bullion’s appeal waned with a stronger dollar and more U.S. interest rate hikes on the horizon.
Silver was down $0.39 or over 2 per cent to US$19.18 an ounce.
Copper was up $3.50 or almost 1 per cent to US$367.10 a pound.
The potential supply-demand gap in copper is expected to place unprecedented strain on supply chains as the energy transition intensifies. S&P mentions this week that unless massive new supply comes online in a timely manner, the goal of Net-Zero Emissions by 2050 will be short-circuited and remain out of reach. According to S&P, copper demand is projected to grow from 25 million tonnes today to about 50 million tonnes by 2035
Oil added $0.27 or 0.3 per cent to US$90.77 a barrel.
Bitcoin
Bitcoin futures were down 8.7 per cent and fell back below the $22K level to a more than three-week low.
Futures
The SPI futures are pointing to a 0.4 per cent fall.
Ex-dividends
There are six companies set to trade without the right to a dividend.
Aurizon Holdings (ASX:AZJ) is paying 10.9 cents fully franked
Kelly Partners Group (ASX:KPG) is paying 1.6 cents fully franked
Magellan Financial Group (ASX:MFG) is paying 68.9 cents 80 per cent franked
Steadfast Group (ASX:SDF) is paying 7.8 cents fully franked
Santos (ASX:STO) is paying 10.7985 cents unfranked
Vicinity Centres (ASX:VCX) is paying 5.7 cents unfranked
Dividends payable
There are three companies set to pay eligible shareholders today.
Healthco Healthcare and Wellness Reit (ASX:HCW)
HomeCo Daily Needs REIT (ASX:HDN)
Regal Investment Fund (ASX:RF1)
Figures around the globe
Across the Atlantic, European markets closed mixed. Paris fell 0.9 per cent, Frankfurt dropped 1.1 per cent and London’s FTSE closed 0.1 per cent higher.
Asian markets closed mixed. Tokyo’s Nikkei closed flat, Hong Kong’s Hang Seng added 0.1 per cent and China’s Shanghai Composite closed 0.6 per cent lower.
On Friday, the Australian sharemarket added 0.02 per cent to 7114.
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Copyright 2022 – Finance News Network
Source: Finance News Network
