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Chapter 1: What is the main topic discussed in this episode?
a listener production.
The Aussie market kicked off the week and month on a softer note. And what should investors be watching this week? Good afternoon. I'm Laura Bessarati.
Chapter 2: What are the initial market conditions for the ASX in June?
It's Monday, the 1st of June. Welcome to the CommSec Market Update. Well, everyone, it's been a bit of a softer start to the new week and month. So at the moment, the Aussie market is just edging lower by a couple of points. We were down a little bit more earlier on in the session, but it looks like we're almost completely flat as we get closer to the end of the day.
We have investors really watching the developments between the US and Iran. So if you remember on Friday, we had a really good session. The ASX 200 index surged 1.6%. It rose to a three-week high. It was also our best day in seven weeks. So there was a little bit of optimism that perhaps the US and Iran were getting closer to a 60-day ceasefire deal.
So there were hopes that would be around the corner. So over the weekend, I guess investors were a little bit optimistic that that might happen, but we haven't seen any breakthroughs just yet. So markets are kind of, you know, just sitting tight, waiting until the next update. We did hear that the US and Iran reportedly exchanged a number of messages over the weekend aiming to
to make changes to the draft agreement, which could potentially extend that ceasefire and open the Strait of Hormuz. But at this stage, there's essentially no updates yet. So I think markets are just a little bit cautious and also ahead of some key things coming up this week as well. So a bit of a softer note to open the week and month.
But if we do look back, yes, we had that really good session on Friday. If we didn't have that solid performance, we actually would have fallen over the course of May. So we ended May higher by 0.8%. That's all thanks to Friday's improvement. If we have a look at what the US did, of course, it wrapped up the month on Friday night. They significantly outperformed us here in Australia.
We saw all US major indices notch further. fresh record highs on Friday night, which means they ended May at all time highs. And that's largely because of the enthusiasm around AI, which really fueled the rally in tech stocks. Remember, about a third of the S&P 500 index is made up of tech stocks. And of course, the tech heavy Nasdaq is full of tech names as well. But if you do want more
On what happened in May, make sure you tune in to my month in review video, which I filmed today, and you can find that on the ComSec YouTube channel.
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Chapter 3: What factors are influencing investor sentiment this week?
But looking back to today, look, most sectors are actually falling. We're seeing three that are improving. Tech is the big standout here. It's up by 5.5%. It's actually on track for its best day in about six weeks. And they're really following gains that we saw in the United States on Friday night. We're also seeing materials being a bit of a bright spot.
And energy was actually lower this morning after oil prices plunged by nearly 12% over the course of last week. That saw oil prices hit their lowest level since mid-April. April, but during today's session, they have rebounded and so have energy stocks. So they're just edging higher by about a third of 1%.
On the flip side, all of the other sectors are lower and we are seeing healthcare down most. It's down 1.7%. And it was the worst performer over the course of May as well when it fell by 9%. So just extending those declines, today it seems to be weighed by CSL, ResMed and Fisher & Paykel Healthcare. Looking at some of the big stock price movements today, there's been quite a few of them.
So starting with the winners, tech stocks have been on an absolute tear, which is why the tech sector as a whole is doing well. So the likes of WiseTech, TechnologyOne, Xero, Live360, they're all near the top of today's winners list. And also Technology One had one of its major shareholders up their stake in the company from around 5% to around 6%. So that provided a nice little extra boost.
Chapter 4: How did US-Iran negotiations impact the Australian market?
The best performer, though, has been hotel commerce platform Sightminder. And this is after surging by a whopping 26% last week. That's after announcing a major partnership with hotel software group Muse, which will make it easier for hotels to manage bookings and sell rooms online through a more integrated system. So today, adding to that big jump, it's up another 11% or so.
The second best performer is ProMedicus. It's jumped almost 9% after announcing another major contract win worth $28 million over the next five years with one of the largest healthcare networks in Pittsburgh metro area in the United States. So it's just continuing to renew their long-term contracts, which is good news for its recurring revenue.
And that's why investors have been hitting the buy button. And the last one for the winners has been 4D Medical. This stock is extending Friday's 19% rally. Today, it's up another 3.5% following news that its lung imaging technology has entered the US healthcare market, meaning patients can now access the scan outside of major hospitals.
And that really opens the door to reach far more patients and healthcare providers. Now, if we look on the other side of things, looking at the losers list, DroneShield has been falling most after a broker cut its target price and downgraded the stock. So today it's down roughly eight and a half percent.
Keep in mind, though, this defense stock did benefit from the outbreak of the Iran war on the back of high demand for their counter drone technology. And it was also the best performer over the course of last year. surging by more than 300%. So that's important context there. Now, sleep apnea device maker ResMed is doing second best leading into the close.
This is after its US listed shares also fell on Friday night. And the third worst performer is property developer Lendlease. And this is after the company announced the sale of its development project in Milan, Italy, which will incur a loss of $175 million over this financial year.
Now, the company said that while the sale will incur a loss, it's part of the company's strategy to free up capital tied up in long dated and complex projects while also avoiding any future costs for the projects. But it seems investors might be a bit worried about the potential for even more losses if it continues selling its projects.
So that seems to be why investors have been hitting the sell button today. And the last one I'm going to talk about, this is one of the smaller stocks on our market that I don't think we've ever spoken about on the podcast before. Now, it's a Melbourne game developer called Playside Studios, and it's definitely worth a mention considering its share price is plummeting by 32% today.
Now, this is on the back of news that Facebook owner Meta has terminated its contract as part of an internal restructure. Now, PlaySide said the decision will result in a revenue hit of roughly $4 million in FY27, and that could also lead to redundancies as it adjusts its cost base. So a big tumble in its share price today. Now, looking ahead from here, a few things to watch tonight.
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Chapter 5: Which sectors are performing well in the current market?
So investors will be paying close attention as she answers questions from members of parliament and senators without any scripted answers. So investors will be listening closely for any hints about the outlook for interest rates. And there's plenty of economic indicators out throughout the week in the United States as well.
But probably the biggest one will be jobs data all the way at the tail end of the week on Friday night. So look out for that one. I think that's a wrap for today. Thanks for joining me. Make sure you tune in to the morning podcast with James Gruber tomorrow morning to wrap up overseas markets and set you up for tomorrow's session. So until then, chat to you guys tomorrow afternoon.
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