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 are the conflicting signals affecting the Australian market?
Mixed messages from the US and Iran have weighed on the Aussie market once again, and investors are waiting for tomorrow's update on economic growth. Good afternoon. I'm Laura Bessarati. It's Tuesday, the 2nd of June. Welcome to the ComSec Market Update.
Well, everyone, at the moment, heading into the close, the Aussie market has barely budged, but it has been quite a turnaround from how we actually opened up the session. So at our worst level of the day, we're actually down 1.1%. And at the moment, our market is down by less than a tenth of 1%. We're down 0.06% or about five points. So basically flat.
Chapter 3: How did the tech sector perform today?
And that's exactly what we saw yesterday as well. We ended the day down by something like four points yesterday. So it looks like it's going to be a very similar session. I think there's just been a lot for investors to digest. We have a lot of mixed and conflicting messages coming from the United States and Iran. There's always progress every single day. There's lots to get through.
But look, those ongoing peace talks, that's the any progress at this stage. There was, you know, a couple of weeks ago, hopes and optimism that perhaps they could come to a deal, but there's been no breakthroughs and investors are very clued onto that. And that's why we've just seen quite a bit of caution around in markets. So I think they are getting a
But of course, also waiting for tomorrow's GDP numbers, which is something that investors are going to be focusing on. And then later in the week, we have Michelle Bullock speaking and US jobs data on Friday night as well. So perhaps just pausing ahead of some of those key updates that are yet to come this week. So we have seen quite a mixed response across the different sectors today.
We're seeing strong gains coming through from the mining space, they're up 1.3%. The best performing sector today is tech though, it's up 4%. 0.7%, a very strong gain, piling onto yesterday's strong improvement as well. But those improvements are somewhat being offset by declines from banks, from retailers, and from property stocks as well. So very mixed across the different sectors.
And I should mention, property stocks down 1.5%, healthcare down 1.2%, consumer staples down 1.3%, financials down by 1%. So a very mixed outcome across the sectors in today's session. There's been quite a bit of company news as well. We should talk about the tech sector a little bit more because yesterday it was up 5.5%. That was its best day in over six weeks.
And today it's up another 4.7% with the likes of Life360, Xero, WiseTech. They're all very close to the top of the winner's list once again today.
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Chapter 4: What impact did the minimum wage increase have on retailers?
So the tech sector has now climbed to a four-month high. And this is, of course, following on from another strong session from its US peers with the tech-heavy Nasdaq notching another fresh record high in overnight trade. Now, the materials sector has gotten quite a bit of attention today as well because it is one part of our market that is quite a bright spot, and that's sales.
somewhat thanks to mining giant BHP, which has hit a fresh record for a second straight day. And that's really further cemented it as the most valuable company on the Aussie market after recently overtaking CBA and taking that top spot once again. So we've seen a very strong performance from the materials sector more broadly so far this year. That's been driven by resilient iron ore prices and
with copper prices not too far off record highs and other commodity prices also remaining strong. So we have seen the materials sector jump 20% in year-to-date terms and financials on the other end are actually down by around 2.3% over the course of this year so far.
Chapter 5: What are the expectations for Australia's GDP figures?
So we're seeing that divide between BHP and CBA continuing to grow, but BHP definitely a bright spot today. Another bright spot has been Australia's largest gold miner, which is Northern Star, and it certainly attracted quite a lot of attention after activist investor
Elliot Investment Management disclosed a stake worth more than $1 billion whilst also calling for a strategic review of the business, asking Northern Star to explore all options, including a potential sale, operational improvements, board changes, and the appointment of a new externally sourced CEO.
Now, Northern Star addressed the matter in a one-page announcement today, saying it regularly reviews strategic opportunities and remains focused on improving operations and finding a new CEO. And it said it shares Elliot's views that the company has the portfolio of assets needed to deliver superior returns today. to shareholders.
So investors have clearly welcomed that news today and that's sent its shares more than 13% higher. But the top performer today has been SRG Global. Now this is a company that helps build and maintain essential infrastructure like roads, bridges, water networks and the likes. And today the company announced that it has secured almost $1.9 billion worth of contracts with
with blue chip clients across a diverse range of sectors. Now, on top of that, it upgraded earnings guidance for this financial year while expecting next financial year to deliver even more earnings growth, which has seen its share price rally by close to 17%. And it's also reached a fresh record high today. I'll also quickly mention DroneShield.
Its share price is higher after winning a contract with the US task force with an initial value of nearly $20 million. And that's sort of reinforced the growing demand for technology designed to detect and stop hostile drones. So DroneShield's share price up today. In terms of the losers though, we've seen TPG being the worst performer. This is the
which expanded coverage and helped attract new customers. But the downside here is that home broadband subscribers are expected to fall 45,000 for the half after flagging that there's been quite a lot of competition in the NBN market. And while it did reaffirm its guidance, it said earnings will be weighted to the second half of the year. So invest
is seemingly a little bit concerned about that near-term outlook for TPG. So its share price down in the order of 7.5% today. And I should also mention the retailers.
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Chapter 6: How did BHP and the materials sector perform recently?
They've been under quite a bit of pressure. I mentioned at the outset that we are seeing consumer facing stocks and sectors down in today's session. And it's been under pressure after the Fair Work Commission approved a 4.75% increase to minimum award wages. Now,
While this decision will boost incomes for millions of workers, investors are concerned it could also increase labour costs for retailers, potentially putting pressure on profit margins.
So the likes of Domino's Pizza, JB Hi-Fi, we have Centre Group, which owns and operates Westfield Shopping Centres, and also Vicinity Centre, which owns a bunch of other shopping centres like Chatswood Chase, the Queen Victoria Building and DFO. all of their share prices are lower in today's session.
Now looking ahead from here, US futures are actually pointing to a bit of a fall when they open up tonight, just pointing down very modestly by about a third of 1%. But of course, this is after all three major indexes closed at record highs overnight.
In other economic news out of the United States, we have an update on job openings for April and we have some earnings results out from Palo Alto Networks, Dollar General and Ulta Beauty to look out for. And then, of course, tomorrow locally, all eyes are going to be on Australia's GDP figures, which will show How fast the economy grew in the three months to March.
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Chapter 7: What company news is driving the market today?
Now the expectation is for GDP to ease from 2.6% year on year in the prior quarter to 2.5% in the March quarter. So the economy is likely expected to expand at a moderate pace. So those numbers will drop at 11.30am Sydney time tomorrow and that's what markets are certainly going to be focusing on
as well as any updates between the US and Iran overnight, of course, could potentially move markets tonight and locally tomorrow. I think that wraps it up for today. Thanks for tuning in and make sure you tune in to the Morning Podcast tomorrow morning with James Gruber. Have a lovely night.
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