Transcript generated automatically by AI and may contain errors.
Chapter 1: What is the main topic discussed in this episode?
A listener production.
Chapter 2: What impact did technology giants have on Wall Street recently?
Tech giants drag down Wall Street.
Commodities rebound after softer than expected US inflation.
And a warning about scammers targeting investors and what you need to know to help protect yourself. Good morning, I'm James Gruber. And I'm Gillian Bowen. It's Friday the 26th of June and this is the morning edition of the ComSec Market Update.
Well, it appears there's a bit of a change in the air and I'm not talking about the weather. Well, where once the magnificent seven tech stocks in the US could do no wrong, now they're the ones dragging down markets.
Chapter 3: How did commodities react to US inflation data?
While semiconductors soared after Micron's blowout results yesterday, overnight the Mag 7 plunged with every one of the mega caps down. So think Apple, Microsoft, Tesla, Alphabet, Amazon, Nvidia ā and Meta. Explain the different stories here, James.
Yes, well, it seems the market is enthused by AI demand, obviously, but is less enthused by the company spending hundreds of billions to buy chips and ramp that demand. And the difference in performance between the two tech subsectors is stark. This year, semiconductors are up 97%, while the magnificent seven have fallen 8%.
And look, I know you mentioned earlier in the week, but if you're listening along right now and you're thinking you want to know more about the challenges and opportunities across the tech value chain, so including semiconductors, cloud infrastructure, and that growing power demand for AI, there is an interview up on our website that I've just done on investing across the AI value chain.
There's a link to it to the website that is in our episode description. Useful weekend watching, me thinks. And you can also watch it on YouTube. But let's get back to today. What are we expecting?
Yes, our share market is likely to open in positive territory this morning. ASX 200 futures were up 0.2% shortly after 6am. Mining and energy stocks should lift from gains in commodity prices overnight after both had sharp falls earlier in the week.
Yeah, on that, our share market slid for a fifth time in six days yesterday to close down 0.7% to $8,749. So let's move on to commodities then, James. What's the latest?
Yes, well, global oil prices climbed after a cargo vessel was hit by an unknown projectile near Oman, sparking worries about how long it could take for oil flows in the Middle East to return to levels seen before the war on Iran. Brent crude futures settled up 2.1% to US$75.26 a barrel. Base metal prices rebound on bargain hunting amid a softer US$1.
Copper futures jumped over 2%, while aluminium futures gained 1.8%. Meantime, gold futures rose as the US inflation data sent the US dollar and bond yields lower. The futures settled 1% higher at US$4,048 an ounce. And iron ore futures were steady, down 0.1% at US$100.37 a tonne.
So if we have a look at currencies then, they were mixed against the US dollar.
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Chapter 4: What are the current trends in the semiconductor sector?
So one Australian dollar is buying 69.11 US cents. The euro is worth 1.1373 US dollars, while one US dollar is buying 161.80 Japanese yen. Okay, let's get a wrap of what's happened overseas with markets. The Dow Jones Index finished up 0.1%. The S&P 500 was flat. The NASDAQ lost 0.5%.
So we flagged it at the top, but let's go through it a little bit more in detail of the tech sector's impact, James, on Wall Street overnight.
Yes, the Nasdaq dropped on Thursday, dragged down by those losses in big tech shares, while a shift into other sectors lifted the Dow. It's connected to worries over hyperscaler spending and expectations of higher interest rates, which are outweighing upbeat signals from Micron and Qualcomm on AI demand.
Apple slid more than 6% after hiking prices for iPads and MacBooks to counter surging memory and storage chip costs. Shares of Nvidia, Microsoft, and Alphabet were also down between 0.8% and 3.5%. But Micron soared 16%, while Qualcomm rose 4%. Other memory chips also moved high, with SanDisk soaring 22%, while Western Digital and Seagate rose 4.9% and 3.2%, respectively.
Caterpillar climbed more than 6%, helping the blue chip down to an intraday high. The S&P 500 industrial sector led gains with a 2.2% rise. U.S.
government bond yields fell after inflation data for May came in slightly softer than some investors had feared, offering a measure of relief even as the Federal Reserve policymakers weigh whether further interest rate increases will be needed to bring prices under control.
The Personal Consumption Expenditures Price Index, the Fed's preferred inflation gauge, rose at a seasonally adjusted 4.1% annual rate in May, the highest rating since April 2023. It gained 0.4% on the month below consensus estimates. Meanwhile, US GDP for the March quarter was revised higher from 1.6% to a final figure of 2.1%.
The US 10-year Treasury yield dipped 1.0% to 4.39%, while the US 2-year Treasury yield also lost 1.0% to 4.13%.
Okay, so having a look at the European markets, the FTSE Euro First 300 Index ended up 0.9%, the UK FTSE 100 added 0.7%. So Europe notched a record high close with healthcare stocks leading the way, while a resurgent AI rally triggered by strong forecasts that we've been talking about from Micron and Qualcomm lent early support in the session there.
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