PM 31 Jul 26: Best week for ASX since April

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CommSec Market Update 9 min 2 speakers 3 chapters transcribed 1 month ago
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What is the main topic discussed in this episode?

Steve Daghlian 0:02
a listener production. This morning, strong gains have faded Friday Arvo with markets cautious heading into the weekend.
Laura Besarati 0:11
And Aussie reporting season is set to kick off next week.
Steve Daghlian 0:14
Good afternoon, I'm Steve Daglian.
Laura Besarati 0:16
I'm Laura Basarati.
Steve Daghlian 0:17
It's Friday the 31st of July.

What was the ASX market’s overall performance on Friday and why did early gains fade?

Steve Daghlian 0:19
Welcome to the ComSec Market Update.
Laura Besarati 0:25
Well, we've finally reached the final day of the month. So things were looking a little bit better earlier in the day. And when I say a little bit, in fact, I mean 10 times better because we're up something like 1% when we kicked off the session this morning. We started sort of fading from around 30 minutes in. And at the moment, heading into the close, we're up by around a tenth of 1%. So not quite as good as, you know, where we were earlier this morning, but still an improvement nonetheless.
Steve Daghlian 0:54
Yeah, I think it's understandable as well for a few reasons. The ASX 200 in the last couple of days has cracked 9,000 points for the first time in over three months. We hit a five-month high as well a bit earlier this week. And that 9,000 point mark is, I guess, a strong level of resistance or it's a psychological barrier, if you will, for markets. So I think investors may be not getting ahead of themselves and carried away with the gains. since we've been closing in on record highs. And there's a lot ahead as well, including the reporting season, as you point out, that's going to take place over the entirety of August. And it's when we find out how corporate Australia is doing. And then we've got the conflict in the Middle East as well, which has had a tendency to surprise us over the course of the weekend.
Laura Besarati 1:38
Yeah, they love to do new things over the course of the weekend and we have a lot to come back to on Monday morning. So we'll see if that continues this weekend. But we are on track to lift over the course of the week up by around 2.3%, which means we would have snapped three straight weeks of declines for the Aussie market. And it looks like we're going to have our fourth monthly improvement as well. And in fact, it's our best weekly performance since early April as well.
Steve Daghlian 2:04
Yeah, so 2.3% this week, but also 2.3% higher over the course of the month.
Laura Besarati 2:08
So this week is what did it?
Steve Daghlian 2:09
It made all the difference, really. It wasn't looking great for most of the month. Over the month as well, I mean, we've had energy stocks very much standing out, up around 11%. The financials up by close to 7%. Healthcare, which is still by far the worst performers of the year, up by around 2%. And the worst performers this month have been tech, which is down as a group by around 3%.
Laura Besarati 2:30
And if you want a little more on what's happened over the course of the month, make sure you watch our month in review video that'll be available on our YouTube, ComSecTV on Monday afternoon.
Steve Daghlian 2:40
Absolutely. And it's been a pretty big week as well. A lot has happened, of course, from inflation data that was softer than expected here in Australia, which has basically just reduced the market's expectations for a rate hike locally by the end of this year. And also a lot of earnings were out of the United States as well.
Laura Besarati 2:57
Yeah, let's talk about those for a minute because the back end of the week has been super busy in terms of earnings. Now, yesterday was the US market's first chance to respond to Microsoft's results because they easily beat market expectations. So its share price surged by 15.5% overnight. That was a historic move for markets, adding nearly half a trillion dollars to its value, which is the most by any stock in a single day. And this was on the back of signs that it's big AI spending bill is in fact translating into profits. So that's what investors have been really worried about coming into. This is, you know, all the money that they're spending on AI, is that going to come back as returns for investors?
Laura Besarati 3:41
So there's starting to be signs of that. Meta, however, fell by around 8%. And this morning, Apple and Amazon were out. Apple is slumping 6.5% despite beating on earnings, but its revenue guidance was quite disappointing.

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