Sunday 30th July 2023
ASX takes a dip as the Bank of Japan impacts markets.
On Friday afternoon, Australian shares experienced turbulence alongside Asian markets due to the Bank of Japan’s announcement of adopting a more “flexible” approach towards managing its yield curve control policy. Despite the S&P/ASX 200 taking a hit of 0.7 percent for the day, the benchmark still managed to post a weekly gain of 1.2 percent – following the market’s broader expectations of slowing inflation after CPI (Consumer Price Index) figures were released earlier in the week. In company news, Pointsbet experienced a 1.5 percent surge, reaching $1.68, following its announcement of expected profitability next financial year. CEO Sam Swan emphasized the company’s strategy of concentrating on bolstering PointsBet’s Australian revenue and winnings, following the sale of its US business the previous month. SiteMinder also witnessed a remarkable surge of 21.5 percent, reaching $4.29, following its announcement of anticipating profitability in the second half of this financial year.
Iron Ore & Chinese Stimulus, plus gold & the US Dollar
Iron Ore prices fell for the day, erasing gains observed earlier in the week that were driven by hopes of more concrete measures for Chinese stimulus. Additionally, following the release of quarterly production updates, Fortescue Metals experienced a 5.4 percent drop, reaching $21.68. Meanwhile, Rio Tinto decreased by 1 percent to $116.62, and BHP saw a 0.8 percent decline, settling at $45.80. Gold miners were also adversely affected, primarily due to the strength of the US dollar, which put downward pressure on the precious metal’s price. Regis Resources recorded a substantial 8.3 percent decline, reaching $1.71, while West African Resources fell by 5.3 percent, reaching 89¢.
The US economy continues to march forward, as sentiment grows.
In the second quarter, the gross domestic product (GDP) showed significant growth of 2.4 percent, surpassing the expectations of the majority of economists. This expansion was driven by strong consumer spending and substantial business investment. On Friday, T. Rowe Price Group experienced double-digit increases up 10.3 percent, reaching $129.12 – marking its most substantial single-day increase since late 2022. This remarkable rise was driven by the money management’s second-quarter profits, which exceeded Wall Street’s expectations. Procter & Gamble’s share price also increased, but by a lesser extent up 1.6 percent, following the consumer-goods impressive performance in its fiscal fourth quarter. Later this week we will have much anticipated Q2 earnings updates from both Apple and Amazon.
Abbey Minogue is account director at Capital Outcomes.
