The ASX is expected to rise today. The upward momentum follows Wall Street’s strong overnight performance after two days of losses.
ASX 200 futures are up 35 points, or +0.45%, as of 8:25am AEST. Yesterday, it closed 17.1 points higher, up 0.23%.
National Australia Bank added 1.5% to $34.28 after the lender beat analysts’ forecasts to book a cash profit of $3.55 billion for the six months to March 31. The result boosted the other big banks as the financials sector outperformed to gain 0.7% with Commonwealth Bank advancing 1% to $115 per share.
On the flipside, Woolworths Group Ltd lost 4.2% after its half-year profit missed expectations and it flagged rising costs. While it posted a 2.8% hike in March quarter sales to $16.8 billion and said total food sales lifted 1.5% on the prior corresponding quarter, it wasn’t enough to hit profit targets.
The other big loser was Bapcor Ltd which owns Autobarn and Burson autoparts. It plunged 23.9% to $4.40 after it downgraded its profit guidance and blamed consumers’ reluctance to spend on their cars as living costs rise.
The best-performed sector was the tech sector, rising 1% on the back of enterprise software group WiseTech’s 2.7% jump 2.7 to $91.21.
Notably, gold stocks bounced back from a couple of mild days of dips and uranium continued on its merry ways.
Wall St was powered by the performances of Apple Inc (NASDAQ:AAPL, ETR:APC) and Block Inc (NYSE:SQ).
Here’s what happened overnight
(source Commsec):
US sharemarkets
Experienced a rally on Thursday, influenced by the US Federal Reserve's unexpectedly dovish stance on interest rates. The Nasdaq index saw a significant boost, increasing by 1.5%, led by gains in tech stocks such as Qualcomm (NASDAQ:QCOM) and Nvidia.
Qualcomm's quarterly sales and profits exceeded analysts' expectations, causing its shares to rise by 9.7%, while Nvidia saw a 3.3% increase. Apple's stock also climbed by 2.2% in anticipation of its earnings report.
Other notable movements included Moderna, which jumped 12.7% after reporting a smaller-than-expected loss, and Carvana, which surged 33.8% following a positive profit forecast.
European markets
In contrast, European markets showed mixed results as investors returned from a holiday to react to new earnings reports and the US Federal Reserve's policy update.
The FTSEurofirst 300 index slightly declined by 0.2%. Novo Nordisk (CSE:NOVOb) (NYSE:NVO) saw its shares drop by 2.7% due to price cuts prompted by competition, despite raising its 2024 outlook based on increased production of its Wegovy treatment.
The UK's FTSE 100 index, however, rose by 0.6%, supported by a 1.9% increase in Shell (LON:RDSa)'s shares after the company reported a better-than-expected profit of $7.7 billion for the first quarter.
Currencies
In recent financial market activity, currencies experienced a strengthening against the US dollar during European and US trade.
The Euro saw an increase, moving from US$1.0674 to US$1.0730, closing near US$1.0725. The Australian dollar also appreciated from US$0.6517 to US$0.6572, with a close near US$0.6565. The Japanese yen made notable gains, rising from 155.70 yen per US dollar to 153.06, and ending the trading session near 153.65 yen per US dollar.
Commodities
Global oil prices displayed volatility, with Brent crude managing a slight increase of 23 cents, or 0.3%, to settle at US$83.67 a barrel. However, the US Nymex crude experienced a minor decline, dropping 5 cents or 0.1%, to close at US$78.95 a barrel, marking a near seven-week low.
Base metals showed a general retreat in prices. Copper futures fell by 1.3%, affected by concerns that recent market highs were driven by speculation rather than sustained physical demand, particularly from China. Aluminium futures also decreased by 1.8%.
In contrast, gold futures slightly declined by US$1.40 or 0.1% to US$2,309.60 an ounce, influenced by renewed investor expectations of US interest rates remaining higher for longer, with spot gold closing near US$2,303 an ounce.
Meanwhile, iron ore futures rose by US$0.87 or 0.7% to US$118.08 a tonne, with the Chinese markets closed for a public holiday.
Apple’s share buyback
Apple Inc. has announced a significant increase in its share buyback program, committing an additional US$110 billion, surpassing the previous year's increase of US$90 billion and exceeding analyst expectations. This announcement coincided with a 4% increase in the quarterly dividend to 25 cents per share. Following these announcements, Apple shares (NASDAQ:AAPL) experienced a 6% rise in the extended trading session.
Despite challenges, particularly in the Greater China region where revenue fell to US$16.4 billion from US$17.8 billion the previous year, the decline was less severe than anticipated, with analysts expecting only US$15.3 billion.
Apple's services segment highlighted a strong performance, achieving a record revenue of US$23.9 billion against a consensus of US$23.1 billion. However, iPhone revenues did not meet expectations, generating US$46 billion compared to the anticipated US$46.3 billion and down from US$51.3 billion a year earlier, aligning with Apple's pre-warnings of a decline due to pent-up demand from the prior year.
The company's overall guidance for the June quarter anticipates revenue growth in the low single digits, despite potential headwinds from currency effects. Apple's management remains optimistic about its financial health and strategic positioning, particularly noting a robust gross margin of 46.6% for the March quarter and ongoing positive trends despite rising commodity costs.
Furthermore, Apple disclosed that it has invested approximately US$100 billion in research and development over the past five years, highlighting its commitment to innovation, especially in the realm of artificial intelligence, with more details expected to be revealed in the upcoming June announcements.
What about small caps?
The S&P/ASX Small Ordinaries (XSO) gained 0.12% yesterday to 2.976.30. Over the past five days, it is down 0.85%.
We come to the end of quarterly reporting season and today we’ll report on archTIS Ltd, Eclipse Metals Ltd (ASX:EPM), Stelar Metals Ltd (ASX:SLB), C29 Metals Ltd (ASX:C29), Spenda Ltd (ASX:SPX, OTC:CROTF) and Patrys Ltd (ASX:PAB).