After a session deep in the red yesterday, the ASX has bounced back to end the week on a strong note.
The ASX 200 is trading 0.5% higher this afternoon as the benchmark index looks set to end the week up more than 2%.
Today’s market strength comes from the Energy, Financials and Telco sectors, while Materials and Tech showed some weakness, and followed a strong session in the US overnight.
Morningstar is of the view that investors are overestimating the upside that tax cuts and wage growth will deliver to cyclical retailers, such as JB Hi-Fi and Super Retail Group. It highlighted the diminishing likelihood of the near-term potential for interest rate cuts to stimulate consumer demand, yet expects “demand growth for consumer electronics and home appliances to normalise by fiscal 2026”.
JBH has been sold off after a weak sales update to investors yesterday raised concerns and is down 1.3% in afternoon trade today.
In other news, apparently there’s too much wine.
A new report from the International Organisation of Vine and Wine shows the world consumed 221 million hectolitres of wine last year— the lowest level of consumption since 1996 when the world had two billion fewer inhabitants.
The result, in Australia, is that our wine production has now outstripped wine consumption for every year of the past decade, according to Rabobank.
“People are more health conscious, we're also seeing demographic changes and particularly with younger generations, more competition in the drink space from other categories, so moving away from wines to other alcoholic or non-alcoholic beverages," said Rabobank analyst Pia Piggott.
Exacerbating the problem for Australian producers was Australia’s trade war with China that began in 2020, when massive tariffs were applied to Australian wine imported to China, which had been a $1.2 billion market.
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