Note from MD: Markets continue to trade sideways, despite strong earnings

The XJO has continued to trade in a sideways channel, with a mixture of positive earnings numbers and U.S. banking sector weakness overnight having an impact.
The XJO has continued to trade in a sideways channel, with a mixture of positive earnings numbers and U.S. banking sector weakness overnight having an impact. However, the XJO’s relatively flat performance masked yesterday’s strong earnings reports, which saw a major rally in the tech sector (+5.2), led by Altrium (+0.26%) and Megaport (+16.9%).  This morning, the XJO opened essentially flat, hovering around 7128 around 10:30am. In terms of sectors, the index is being propped up by A-REIT (+3.73%) and IT (+2.91%), with 7 out of 11 sectors in the red. While the index has lost around 1% for the past week, it has gained over 1% over the last year to date.  Despite BHP’s recent drop in profits for FY2023, mining stocks are mostly in the green this morning, including Fortescue Metals Group Ltd (ASX:FMG), Rio Tinto Ltd (ASX:FMG) and Newcrest Mining Ltd (ASX:NCM), all up by around 1%.  In the U.S. overnight, the major stock market indices all edged slightly lower, with the S&P down 0.3% and Dow Jones Industrial Average losing 0.5%, while the Nasdaq Composite ended marginally higher.  This slight U.S. decline was largely a result of weakness in banking and retail shares after S&P Global once again cut credit ratings and revised its outlook for multiple U.S. banks on Monday, citing “tough” operating conditions.  The benchmark 10-year Treasury yield eased slightly Tuesday to 4.33%, hitting its highest level since 2007 this week.  In local economic news, other than a whole raft of earnings reports coming in, new home sales in Australia fell by 2.4% in July.  Looking ahead, there is a key speech from Federal Reserve Chairman Jerome Powell at the Kansas City Fed’s annual economic symposium this Friday which could have major implications for interest rates. In the last few months we have successfully closed deals with a select few high profile resources companies, backed by some of the best mining investors in the world. We have a number of carefully selected resources deals going live in the coming months, including Pre-IPO and ASX-listed placements. To find out if you can access these deals, click here. You should only act on the information we provide if you are confident that you fully understand what you are doing. Past returns do not always indicate future returns, and it is also possible to make significant losses. There is always a risk of loss when investing. Reach refers to Reach Financial Group Pty Ltd (ABN 17 090 611 680) that holds Australian Financial Services Licence (AFSL) 333297 and to its related entities and Corporate Authorised Representatives (CAR) Reach Markets Pty Ltd (ABN 36 145 312 232) (CAR No: 431191) and Reach Corporate Pty Ltd (ABN 76 638 960 540) (CAR No:1281636). Reach offers investment opportunities for self-directed investors; you need to have the experience and capabilities to analyse the investment and make your own decision that it is suitable for you. Contact Reach on 1300 805 795, (03) 8080 5795, [email protected] or visit www.reachmarkets.com.au for further details. 
 

This Week’s News

News

31st May 2024

Top geo backed by leading resources funds believes he has discovered a potential new gold-copper district

News

8th May 2024

BHP Xplor winner coming to the ASX

News

4th May 2024

AI Industrial Revolution: Aussie company unlocking AI for multinationals

General Advice Warning

Any advice provided by Reach Markets including on its website and by its representatives is general advice only and does not consider your objectives, financial situation or needs, and you should consider whether it is appropriate for you. This might mean that you need to seek personal advice from a representative authorised to provide personal advice. If you are thinking about acquiring a financial product, you should consider our Financial Services Guide (FSG)

including the Privacy Statement and any relevant Product Disclosure Statement or Prospectus (if one is available) to understand the features, risks and returns associated with the investment.

Please click here to read our full warning.