Chapter 1: What is the main topic discussed in this episode?
A Listener Production.
More twists in the Middle East conflict are sending markets on another wild ride.
So what could reports of progress towards peace mean for the Aussie share market, especially when Wall Street is pushing towards fresh highs?
Plus the story behind the .tv domain name and what it means for a tiny Pacific Island country. Good morning, I'm James Gruber. And I'm Gillian Bowen.
Chapter 2: What recent developments in the Middle East are affecting global markets?
It's Friday the 29th of May and this is the morning edition of the CompSec Market Update.
Well, happy Friday and hello to anyone who may be joining the podcast for the first time today or this week. I feel like a broken record this morning, James, which isn't a surprise seeing we've been having similar conversations for months. But we can't not bring our listeners the latest on the US-Iran conflict because, look, US markets continue to react by the minute to the changing headlines.
So rather than a final peace deal, today's developments are about extending the ceasefire. According to a US source, the US and Iran have reached a tentative deal to extend the truce by 60 days.
Chapter 3: How might peace progress impact the Australian share market?
Yes, so going into the detail, it would require Iran to remove all the mines from the Strait of Hormuz within 30 days and ensure shipping through the Strait is unrestricted and start further talks on Tehran's nuclear program.
But look, I'll note Donald Trump... hasn't agreed to the terms. And I was listening earlier this morning to Treasury Secretary Scott Besant speaking at the White House, who said the US president has, quote, several red lines and he wouldn't make, quote, a bad deal. We're actually in a ceasefire right now and have been for weeks. But when is a ceasefire no longer a ceasefire?
Because both sides have continued to bomb each other's targets. I don't want you to try and answer that, James. Instead, a more straightforward one.
Chapter 4: What is the significance of the .tv domain name for Tuvalu?
How is the open looking for our share market?
We're set to open in positive territory this morning. The ASX futures are up 0.7%. That was shortly after 6am, mirroring the gains on Wall Street. Yesterday, so Thursday, there was a sell-off. The ASX 200 closed lower. They dropped 1.4% to 8,592.9. And over the last five days, the ASX 200 has lost 0.3%.
And I note it's now down 1.39% year-to-date. And earlier in the week, I was reflecting our share market being relatively unchanged year-to-date. So that's quite a difference after yesterday's performance. Let's move on to commodities. James, what's the latest there?
Global oil prices were mixed after the deal news came out. Brent crude futures settled 0.6% lower at US$93.71 a barrel. Base metal prices were higher on the proposed ceasefire deal. Copper futures rose 1.4%, while aluminium futures advanced 0.7%. Gold futures rebounded following the report of the Iran deal. The futures settled almost 2% higher to US$4,532 an ounce.
Mid-term iron ore futures were steady, down 0.2% to US$109.04 a tonne.
If we look at currencies, so they were higher against the US dollar. One Australian dollar is buying 71.61 US cents. The euro is worth 1.1647 US dollars, while one US dollar is buying 159.25 Japanese yen. Okay, so let's get a wrap now of what happened overseas with markets. The Dow Jones Index finished up 0.1%, the S&P 500 was 0.6% higher, and the NASDAQ added 0.9%.
So James, again, lots to watch right up until the closing bell.
That's right. So the S&P 500 and the Nasdaq extended gains, briefly hitting intraday record highs after those reports of the ceasefire deal, while investors also digested key inflation data, which we'll get to. Five of the 11 main S&P 500 sectors were in the green. The healthcare sector gained 1.4%.
Eli Lilly advanced 4% after CVS Health said it would restore the drugmaker's weight loss injection Zepbound to its coverage and add its newly approved obesity pill Foundeo. Tech shares also moved 1.3% higher.
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Chapter 5: What are the latest updates on the US-Iran conflict and its market implications?
Microsoft gained 3.5% after news website The Information reported the company would release a new coding model next week. Snowflake soared 37% after the data analytics firm lifted its annual product revenue forecast and announced a five-year AI infrastructure deal worth US$6 billion with Amazon.
Among other movers, Dollar Tree climbed 18% after the discount retailer lifted its full-year profit forecast. Meanwhile, in US economic data, inflation increased at its fastest pace in three years in April, driven by higher energy prices amid the Iran war. Cementing economists' views, the US Federal Reserve would hold interest rates unchanged well into next year.
The personal consumption expenditures price index jumped 3.8% in the 12 months through April. Meanwhile, US GDP for the first quarter was revised lower to a 1.6% annualized increase, with momentum expected to slow further this quarter. Meantime, US government bond yields fell on reports of the Iran deal. The U.S. 10-year Treasury yield slipped 3 points to 4.45%, while the U.S.
2-year Treasury yield dipped 1 point to 4.02%.
Look, let's get an update on the European markets. The FTSE Euro First 300 index ended down 0.5%. The UK FTSE 100 lost 0.8%. So Europe closed lower on Thursday, though losses eased on hopes of a new ceasefire deal. Financials led the sell-off. The
BT lost 3.4% after a media report said the British government will oppose any attempt from Indian billionaire Sonal Bharti Mittal to increase his stake in the telecoms group. Meantime, French semiconductor materials supplier Soitec shot up 25% after reporting annual sales above market expectations.
Defence stocks, Renk, Rheinmetall and Saab all rose as Canada and Norway sought deals with European companies. Let's take a look at what's on the watch list this Friday. In Australia, private sector credit figures for April are out.
Looking ahead to next week, Cotality will release national housing prices on Monday, with the potential for a month-on-month fall following recent sharp drops in auction clearance rates. In the US, Dell, Autodesk and Lululemon will report their results shortly. They were due after the closing bell on Wall Street with Thursday's trading session wrapping up a short time ago.
It's time for our one more thing before we head off. James, what do you have for us today?
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