Market falls on tech, iron ore weakness, Newcrest sinks as Newmont disappoints, Atlas down despite strong traffic

Weakness in the technology sector drove local shares lower on Friday, with the S&P/ASX200 (ASX:XJO) and All Ordinaries (ASX:XAO) both dropping 0.2 per cent on Friday. Despite this the 200 managed to finish the week in positive territory with a 0.2 per cent gain, driven by a recovery in the financial sector, up 2.7 per cent, on hopes of a better than expected economic outcome. Xero (ASX:XRO) was a major laggard, dropping 3.9 per cent on concerns about long-term growth and valuations for the sector. Shares in Newcrest (ASX:NCM) followed other global gold miners lower, falling 5.3 per cent, after its potential acquirer Newmont Mining (NYSE:NEM) reported a 17 per cent drop in gold production and much weaker revenue growth. Ladies retailer Mosaic Brands (ASX:MOZ) gained close to 18 per cent, after moving nearly 40 per cent higher, with the company flagging a $33 million turnaround from last years $16 million loss. Global toll road owner Atlas Arteria (ASX:ALX) fell 1 per cent, with growth concerns offsetting strong grown in traffic, up 4.8 per cent, and toll revenue, 8.2 per cent. Over the week Flight Centre (ASX:FLT) was a standout, gaining 10.5 per cent on surging travel spending while graphite miner Syrah (ASX:SYR) sank by 20.5 per cent.

Dow manages longest winning streak in 6 years, American Express delivers strong growth, Nasdaq falls

The Dow Jones continues to regain lost ground on the tech heavy S&P500 and Nasdaq benchmarks, gaining 0.01 per cent on Friday, extending the indexes winning streak to 10 days, the longest since 2017. The S&P500 managed a 0.7 per cent gain, while the Nasdaq fell 0.2 per cent on what was a reasonably quiet day for earnings results. American Express (NYSE:AXP) fell by close to 4 per cent despite the company reporting an 8 per cent jump in volumes to US$427 billion for the quarter and revenue growth of 12 per cent. This was a slight slowing from previous quarters, however, interestingly, dining has overtaken travel as the largest source of transactions. Oil and gas business Schlumberger (NYSE:SLB) fell 2 per cent, however the company is seeing a strong recovery in investment, with revenue moving 19 per cent higher during the quarter, supported by higher oil prices. 

Economic resilience continues, Tesla growth accelerates, earnings ahead of expectations

The mixed messages coming from economic data remain stronger than ever, with the Australian economy marking another strong quarter of employment growth, with few of the job losses predicted or required by the central bank to slow inflation being felt yet. This continues to suggest further rate hikes may be required, however, outside of dining and travel, spending is clearly beginning to reduce. Both Tesla and Netflix delivered solid quarterly results, with the former growing sales by 47 per cent and the latter seeing significantly better than expected subscriber numbers. Despite this, both were sold off on concerns that profit margins remain under pressure. Across earnings season to date, the banking sector has been the standout, however, of the 18 per cent of S&P500 companies that have reported, 75 per cent have been ahead of expectations, surprising pessimistic traders.

Drew Meredith

Drew is editor of The Inside Network's publications and a principal adviser at Wattle Partners.