ASX overcomes bond yields, Link's new bid, News Corp delivers record

ASX overcomes bond yields, Link’s new bid, News Corp delivers record

The S&P/ASX200 (ASX: XJO) closed the way it opened, with another strong day of trading, gaining 0.5 per cent which took the weekly gain to an unexpected 1.8 per cent.

The rally came despite an unexpected increase in bond rates that many suggested would see an end to the sustained rally in global markets.

Friday followed the narrative of the week, with every sector higher apart from energy, which fell 0.6 per cent and 1.9 per cent for the week after the White House accused OPEC+ of threatening the economic recovery.

Private equity group Carlyle lobbed another bid for Link Administration (ASX: LNK) which appears to value the company at $5.38, below the original bid which was deflected by management.

Under the deal, shareholders will receive $3.0 for their LNK shares and $2.38 in the form of a distribution of their ownership in PEXA; shares finished 8.6 per cent higher but well below the offer price suggesting there is little confidence in the deal.

News Corp (ASX: NWS) was the other highlight along with REA Group (ASX: REA) with the former jumping close to 7 per cent after reporting the strongest quarterly profit in 140 years.

Profit reached US$267 million in the quarter on an 18 per cent increase in revenue as the likes of Dow Jones and the Wall Street Journal leverage their digital presence.

REA gained 5.6 per cent after reporting another 22 per cent revenue growth as the property market remains resilient. 

Over the week the communications and real estate sector both gained over 4 per cent but it was Nufarm (ASX: NUF) and ProMedicus (ASX: PME) leading the way both up around 15 per cent.

Tyro (ASX: TYR) and Domino’s Pizza (ASX:DMP) were the biggest losers falling 19 and 14 per cent respectively.

Markets close at records, Peloton tanks, Uber surprises, job gains delivered

The upward march continued in US markets this week with all three benchmarks closing higher on Friday, the Dow Jones the highlight gaining 0.6 per cent.

Both the S&P500 and Nasdaq were also positive, up 0.4 and 0.2 per cent, but it was all about the reopening trade.

Groups including travel booking platform Expedia (NYSE: EXPE) and Live Nation (NYSE: LYV) gained more than 15 per cent each after unemployment fell to 4.6 per cent and trading conditions returned to normal.

Over the week it was all about the Nasdaq, which gained 3.1 per cent whilst overcoming bond yield increases with the S&P500 and Dow up 2.0 and 1.4 per cent respectively.

The return to normal is being evidenced by the differing performance in companies with at-home fitness group Peloton (NASDAQ: PTON) falling over 35 per cent after announcing sales that were a third lower than analysts expected.

On the other hand, Uber gained 4.2 per cent after announcing that revenue had grown 72 per cent on the prior year on the back of a 57 per cent increase in quarterly bookings to US$23 billion.

Bitcoin goes mainstream, markets vs. central banks, property crash as CBDs return

This may well be the week that saw cryptocurrency move into the mainstream.

There were three important announcements, the first from regulator ASIC which effectively outlined the way forward for a Bitcoin or crypto tracking ETF to be listed on the ASX.

We then saw the Commonwealth Bank offer crypto trading and finally the listing of BetaShares Crypto Innovators ETF (ASX: CRYP) which doesn’t even own crypto, see record trading volume on its first days.

Whilst there is little certainty in the future, it very well seems to becoming well ingrained.

The market vs. central bank rhetoric continues to build with the RBA giving up on yield curve control but maintaining their stance that the cash rate will not be increased until at least 2024.

This may well be a story of short-term vs. long-term views colliding, as is typically the case in markets.

There appears to be a two-speed economy coming to property markets, with well-known investor Chris Joye flagging the risk of a 20 per cent fall in residential property prices should interest rates rise by 1 per cent, but also signs from the UK and the US that CBDs in Sydney and Melbourne will bounce back quicker than many expect.