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Chapter 1: What is the main topic discussed in this episode?
A listener production.
The losing streak remains intact in a quiet start to the week for the ASX.
But don't worry, it's a super busy week ahead.
Good afternoon, I'm Steve Daglian. I'm Laura Bassarati. It's Monday the 27th of April. Welcome to the ComSec Market Update.
Chapter 2: Why is the ASX200 experiencing a five-day decline?
Look, it's been a fairly quiet session for the Aussie market. We kind of flagged this on Friday because it is a public holiday across some states and territories, but not all. So for your information, if there's even just one state or territory that's open, that means the ASX is open. So that's what we're seeing today. So at the moment, the Aussie market down. by just a quarter of 1%.
We did narrow some bigger losses from earlier on in the session. So at the start of the day, we're up closer to 0.6%. But look, we are still on track to post a fifth straight session of declines.
That's right. And look, volumes were looking a little light not too long ago, but now they've actually picked up a bit. So it's not that quiet, really, as far as the amount of money flowing through markets, despite there being, as we pointed out, a few holidays here and there. As you rightfully mentioned, though, just a slight decline of roughly a quarter of a percent.
But we are sitting at approximately a three-week low at the moment. It certainly has taken the shine off what it was that very strong gain that we had at the start of April. So we've only got three sessions now left in April before things wrap up. And at the moment, we're up about 3.3% this month. Now, at the peak of the month, we're actually up by almost 6%. So we came off the ball a bit.
It's not really surprising. The US-Iran negotiations collapsed over the month, essentially. The Strait of Hormuz remained shut. Oil prices are still up over 40% from where they were before the war started. And the signals we had over the course of the weekend and the last 24 hours as well has been quite mixed at best.
Yeah, but it's been a bit of a different story in other places or share markets around the world. So today we did see Japan and South Korea stocks hit record highs. They've seemed to shrug off those stalled US-Iran negotiations. Last week, we did see US share markets hit record highs as well. So we are lagging behind just a little bit. We did get
quite close to a record high earlier in the month, as you point out. But at the moment, we're about 5% away from that record. And we should mention the latest update between the US and Iran. This is sort of breaking news because Iran has reportedly made a new proposal to the United States through Pakistani intermediaries to de-escalate regional tensions.
Now, according to the report, the proposal outlined a framework to reopen the Strait of Hormuz and end the war. with nuclear negotiations postponed for a later stage. on a permanent end to the war. Now, the White House has reportedly received the proposal, but it's unclear whether the US is willing to explore it. So I'm sure we will hear developments of that.
But that's essentially eased immediate supply concerns and sort of lifted that risk sentiment. And I think that's why we have somewhat narrowed the losses that we've seen in today's session. Still a lot of caution around just because they've put that proposal forward doesn't mean the US will take it on. We don't know what's going to happen.
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Chapter 3: What factors contributed to the increase in market volumes?
So I guess one of the leaders when it comes to chips and that whole AI push as well. So it certainly has been one of the beneficiaries there. And we're also in the profit reporting season in the United States at the moment and roughly 18 every 10 companies that have released their results so far have generally done a bit better than what the market was expecting under challenging conditions.
So, this has kind of also been helping markets lift despite all the uncertainties in the Middle East at this stage.
Yeah, absolutely. Company earnings have been front and centre along with what's going on between the U.S. and Iran. Now, looking across the different sectors today, it's mostly a sea of red. We are seeing energy stocks being some of the worst performers. That's despite oil prices extending their rallies. They pushed above 107 U.S. a barrel, even getting closer to 108 earlier in the day.
They gained around 15% over the course of last week. but they have pulled back a little bit. They're still higher in today's session, but pulled back a little bit on those reports that Iran has submitted a new proposal. We've seen gold going the other way. It was down 3% over the week, and we did see Aussie gold miners tracking those declines.
They were down around 4% last week, but today gold price is actually improving on that latest news.
The financials are slipping for the 10th time in 11 days. It's been quite a run for that sector, but it's actually still up this month. We had a very strong start to April, so remember that, but still down today at least by about half a percent. Tech is down around one. The utilities are falling by around 3%, so another big loser.
And we are seeing some improvements coming through from healthcare, which was a huge loser last week because of stocks like Cochlear that downgraded its expectations. And the hearing implant maker fell something like 40% in just one day. So it's got a long way to go to recoup those declines.
Absolutely. And look, there has been a fair bit of company news around today as well. Now, the best performer on the ASX 200 has been toll operator Atlas Arteria. Now, it surged about 14% after receiving a takeover offer from asset manager IFA. worth approximately $7 billion or about $4.75 per share, which is a 10% premium to its closing price ahead of the offer.
Now, the boards of Atlas Arteria will now establish an independent board committee to consider the offer and they'll update shareholders in due course. They've told investors to take no action for the time being in relation to the offer, but shareholders have clearly been excited by this and that's driven its share price to a two-month high.
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Chapter 4: How did the US-Iran negotiations impact global markets?
So it reckons it's basically going to rake in something like $8.5 million per year in revenue. Megaport hasn't actually had a down day on the market in over two weeks now. So it's been a pretty good run for the tech stock.
Another winner today, the second best is gold miner Newmont. Its share price is up around 7% despite it being a fairly quiet session of trade as we alluded to towards the top. But you mentioned it hasn't been that quiet and maybe it's because investors have been buying into these shares that we have been talking about.
Look, it seems to be extending some of its modest gains from Friday after it came out with a stronger than expected trading update. It was only up a very modest 0.7% on Friday, so doing much better today with that near 7% lift. And it's also received a lift in its earnings forecasts and target price by a broker today. So that certainly helped to drive its share price higher.
Origin is another underperformer today. It's down in the order of five, around 5%. It downgraded guidance at its Australia Pacific LNG site in Queensland. It basically said that revenue at the site fell by close to $250 million over the March quarter. It actually blamed this on bringing in less money for its LNG over that three-month period because of a strengthening US dollar and lower sales.
It also pointed out that changes in oil prices, which we've obviously had since the war in Iran started a couple of months ago, does have quite a lagged effect on its long-term export contracts. So it certainly isn't immediate if you're wondering why revenue would fall when prices of LNG and other commodities have gone through the roof recently.
So it expects this not to actually flow through until 2027 or FY2027. It also pointed out that domestically, electricity and gas markets have remained quite well supplied and kind of insulated, I guess, from the global price movements.
All right, let's look ahead because we have a super big week coming up. So looking to tomorrow first, we have some quarterlies out from Beach Energy, Coronado, Caroon, Whitehaven Coal, so plenty in the energy space, which could drive share prices around. But looking to, you know, the rest of the week, things really heat up from sort of Wednesday onwards.
We have MAG7 earnings, the magnificent seven. So Alphabet, Amazon, Meta, Microsoft all on three. Thursday morning local time. Friday morning will be Apple. And then we just have to wait for Nvidia on the 20th of May. That'll be the last of the magnificent seven to report. Keep in mind, just one of these stocks alone is bigger than the entire Aussie market.
So these earnings could really drive markets. But I think the big thing locally will be that Aussie quarterly inflation data.
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