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Chapter 1: What is the main topic discussed in this episode?
a listener production.
Local stocks slide for a fourth day following the budget and bank earnings.
And Aussie mining giants BHP and Rio Tinto climb to fresh records.
Good afternoon, I'm Steve Daglian.
I'm Laura Bessarati.
It's Wednesday the 13th of May. Welcome to the CommSec Market Update.
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Chapter 2: Why did the local market slide for a fourth day?
been an interesting day on the Aussie share market. We have two of our largest sectors going in opposite directions, but one is falling more than the other. And that means in afternoon trade, the Aussie market down by roughly half of 1%. We are on track for our fourth straight session of declines.
Chapter 3: What factors contributed to the rise of BHP and Rio Tinto?
And it looks like we've fallen by almost 3% over the past four days at this stage.
Yeah, it hasn't been the best run, four straight days of declines. We were actually down quite a bit more than that in the early part of the session though, right on the open actually. So we did at least recover from those lows, but it does mean that we've basically just fallen into negative territory for the month so far.
And that means that since the US-Iran conflict first started in late Feb, we're down by roughly 6.5%. Now, today though, at least it really came down to the big banks, which have wiped out something like 100 points from the ASX 200. So not including those, the market would have actually been doing okay today.
The big event of the week, of course, for us, the federal budget that was handed down last night. As usual, many of the key initiatives were already flagged and leaked by the government. So typically is not a real share market moving events, but there were some changes announced to capital gains tax, negative gearing.
That's received a bit more attention than we typically would see from the federal budget and along with savings on the NDIS. The impact on the share market, we'll get to that in a little more detail later on in the podcast.
So at the moment, the Aussie market currently hovering roughly around its lowest level in about six weeks. So we really haven't been able to shake off those declines from CBA today after they released their results. So the financial sector currently sitting at its worst level since December. It's down by 4%. And in fact, it's the only sector that's falling.
So completely the financials holding the market back because 10 of the 11 sectors are lifting today.
Yeah, exactly. So you're right. Pretty much every other sector is doing reasonably well. The material's up around two. Consumer discretionary up around 3%. Property trusts are lifting by a little more than 1%. So the rest of the market, we're seeing improvements, but much more modest. We should touch on CBA because it is down by roughly... 10% today.
So pretty sizable decline for the bank, the biggest decline in a number of years, in fact. So it did hand down quarterly cash profit numbers and results, $2.7 billion cash profit, actually up 4% on the prior corresponding period 12 months ago, but 1% below the average that we saw over the first half of the year, perhaps a little shy of what the market was hoping for there.
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Chapter 4: How did the federal budget impact market movements?
And And that's because First Mac registered the Zip name back in 2004 for one of its home loan products before Zip was even founded. So it's been a decade-long fight between the two companies over who could use that Zip trademark. And today, Zip has been told it has 28 days to make the change.
Helios is the worst performer on the broader All Ordinaries Index. It's down around 22.5%. It actually hit an all-time low on the market today. It's been around for quite some time, for close to 30 years. Now, cut its full-year guidance, basically weaker pathology volumes. higher labor costs. This is all weighed on its performance.
It also mentioned that labor costs could be impacted to the upside in the fourth quarter by close to $2 million because of a ruling from the Fair Work Commission with some findings there around gender-based undervaluation, which basically could just mean higher costs for the group as well.
It also pointed out that no new funding for pathology was announced in last night's federal budget as well, which it said was a concern because wages have been lifting and they're not getting the support that they require. So Helios is one of those stocks that has really struggled post-COVID when they were carrying out millions of those PCR COVID tests.
That was a big driver of earnings, but since then, it's had a pretty rough time on the market.
And we should quickly mention uranium miner Paladin Energy. Its shares doing absolutely worse today, down at 12%. It did release its half-year results and its shares are down despite swinging to a profit.
Let's look forward as well because tonight we do have a weekly update on crude oil inventories in the United States, something that has a habit of sometimes moving around oil prices. Outside of that, we've got President Trump arriving in Beijing tonight ahead of He's meeting with China's President Xi on Thursday and Friday. So that will be interesting.
And tomorrow, we've got a bunch of earnings locally as well from stocks like Grain Corp and also Xero. So there'll be two to watch. And also, I would suggest you could check out our equity market strategist, James Gruber's reel, which he recorded earlier in the day, which gave a bit of detail on the budget as well.
I think that's a wrap for today. We'll chat to you again tomorrow.
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