Thursday 13th July 2023
Share market surges on US inflation retreat, property, technology jump, gold miners jump
The Australian market followed a strong US lead, with both the S&P/ASX200 (ASX:XJO) and All Ordinaries (ASX:XAO) jumping more than 1.6 per cent on Thursday. It was all about the continued march lower of US inflation, which bodes well for the rest of the world, with headline inflation falling to 3 per cent in June. Naturally, this benefitted the most interest rate sensitive sectors, being property and technology, which both moved 3.2 and 2.3 per cent higher. Lower bond yields likely place less pressure on property revaluations, with Goodman Group (ASX:GMG) up 4.1 and Scentre (ASX:SCG) 3.4 per cent. Only 14 companies finished lower on the day, led by insurer QBE (ASX:QBE) with investors wary of lower returns on the companies invested premiums. Gold miners also buoyed the materials sector, which gained more than 1 per cent, as lower rates make the precious metal more attractive, Newcrest (ASX:NCM) was the standout, finishing 3.7 per cent higher.
Origin expands hydrogen project, Alliance Airlines upgrade, China exports sink
Aircraft charter firm Alliance Aviation (ASX:ACQ) gained more 13 per cent after the company surprised the market with a better than expected earnings upgrade, suggesting better than expect profits in the second half while also confirming another $100 million in fund from investors in the US. Origin Energy (ASX:ORG) shares underperformed, gaining just 0.4 per cent despite the company confirming the Federal Government would be adding $70 million into the group’s green hydrogen project in Newcastle, which will assist in cutting emissions at Orica’s nearby operations. Platform provider Netwealth (ASX:NWL) gained 5.2 per cent, along with technology sector, after management reported a 26 per cent increase in funds invested on the platform to $70.3 billion in what remains a highly competitive sector. Not unexpectedly, Chinese exports fell 12 per cent compared to this time last year, as the end of lockdowns takes time to allow supply chains to return to normal.
Business inflation pushes market to four straight days of gains, Amazon jumps, USD weakens
Another day, another positive piece of economic news for the US economy, with producer price inflation showing price increases of just 0.1 per cent during the month. This was lower than expected and suggests the slowing of inflation without a severe economic recession may just be achievable. The result was a 1.6 per cent increase in the Nasdaq, 0.1 per cent gain in the Dow and 0.9 per cent in the S&P500, the fourth straight day of gains. With bond yields falling the USD index dropped to it’s lowest level in a year compared to other major currencies. In company specific news, Amazon (NYSE:AMZN) gained 2.7 per cent after the company announced that its Prime Day sale was driving the best sales result on record. Disney (NYSE:DIS) was flat despite the board confirming that returned CEO Bob Iger had extended his contract for another two years.
Drew is editor of The Inside Network's publications and a principal adviser at Wattle Partners.
