GOLD 050627 AFR PICTURE BY PETER BRAIG / afrphotos广州桑拿 Goldbar, gold, reserve bank of australia, banking, shares, accounts, gold prices, interests, money, share market, asx, stock exchange, interest free, pouring gold, mining, gold miners, gold nugget, nuggets, kilos of gold, victoria, australia AFR FIRST USE ONLY afrphotos广州桑拿 SPECIALX 270605Shares ended the week little changed, with some strong earning-related gains from Super Retail and Medibank capping off some dramatic moves in individual stocks over the five sessions.
The S&P/ASX 200 index inched 2 points lower on Friday to 5744, which brought the week’s losses to 3 points.
The lack of movement at the headline level concealed some dramatic underlying price moves, as the busiest week of earnings season produced some big individual winners and losers.
Among those punished by investors were BlueScope Steel, which plunged 20 per cent over the week, Healthscope, which sank 17 per cent and telco Vocus, which was whacked 23 per cent.
It was a week of strong gains for resources stocks, as earnings results from big energy and mining stocks were enthusiastically received. BHP added 5.1 per cent, Rio Tinto 6.5 per cent and Fortescue Metals a hefty 9.2 per cent. Santos soared 11 per cent and Oil Search 8.6 per cent, while Woodside Petroleum, which didn’t report this week, nonetheless lifted 3.2 per cent.
Resources have been the clear standout this reporting season, noted UBS equity strategist David Cassidy.
But, more broadly, results and guidance overall has been underwhelming in a reporting season that’s now around 80 per cent complete.
“Disappointments have been concentrated in the ex-resources and ex-banks segment of the market, with insurance and telecommunications the weakest sectors,” he noted.
Another outperformer was a2 Milk, which jumped 13.6 per cent.
Among Friday’s results, standouts were Medibank and Super Retail Group, which over the session added 6.7 per cent and 7.3 per cent, respectively. Qantas lifted 3.8 per cent on Friday as it revealed its profits.
A 3.4 per cent fall in heavyweight Woolworths over the week following its earnings release helped counterbalance the strength in resources, as did a 1.6 per cent drop in CBA. Also weighing over the week were IAG, which dropped 5.1 per cent, and Brambles, which lost 4.3 per cent. Both released earnings this week.
Markets are now looking ahead to a meeting of economic leaders that’s taking place at Jackson Hole in Wyoming. Federal Reserve chief Janet Yellen to set to speak, as is European Central Bank head Mario Draghi.
“Each policy maker must convince the markets of the earnestness of their intentions. Ms Yellen needs to reassure traders that the Fed will indeed pursue its tightening path and that a rate hike in December is a near certainty,” said Boris Schlossberg of BK Asset Management.
“Mr Draghi, on the other hand, must dampen any expectations of an immediate taper despite the fact that conditions in the Eurozone have improved materially and ultra – accommodative policy is no longer necessary.”
Markets are broadly becalmed ahead of this meeting. The ASX has traded in a 100-point range for about three months.
“This environment should start to fade next week as the data cycle picks up and the summer holidays draw to a close,” noted ANZ’s David Plank. Stock watch???Asaleo Care
Asaleo Care shares surged to a three-month high on Friday, climbing 10 per cent on Friday to $1.60 after two brokers upgraded the stock. On Thursday, the personal hygiene products company posted a half year net profit after tax of $28.2 million, compared with $27.1 million a year earlier. Citi raised its recommendation on the stock to “neutral” from “sell” saying that Asaleo’s revenue growth outlook is becoming more encouraging given its increased business-to-business sales in both Australia and New Zealand. The rise in the Australian dollar and softening pulp prices will help earnings, the analysts believe “Asaleo’s earnings should be stable over the next three years and at 12 times price to earnings, we see the stock at fair value,” the Citi analysts said. Credit Suisse analysts lifted their rating on the stock to “outperform”. MoversEarnings report card
Profit growth of 5 per cent for Australian-listed companies outside the over-earning mining sector “is all right,” AMP Capital head of investment strategy Shane Oliver said. But “it’s well below” other regions. In the US, annual earnings growth is coming in at around 11 per cent, Mr Oliver said, while European and Japanese listed companies are growing profits at around 30 per cent lately. “It’s another reason to maintain a bias towards global shares over Australian shares,” he said. Hurricane Harvey
Hurricane Harvey sent oil tumbling and gasoline margins soaring as it approached the refining hub on the Gulf Coast of Texas. Harvey, the first hurricane to strike Texas since 2008, has forced workers off some platforms, closed marine terminals and threatens to flood refineries in Houston and Corpus Christi. With the storm “you have much less oil demand and you have a commensurate drop in product demand”, amid the likelihood of refinery shutdowns, Kyle Cooper, director of research with IAF Advisors in Houston, said. “There is a very serious risk of flooding.” Japan
Japan’s key measure of consumer price changes rose ever so slightly in July, lagging well behind gains in economic growth as the central bank struggles to spur significant improvement in inflation. Official data released Friday showed that core inflation accelerated to a tepid 0.5 per cent in July, a long way from the Bank of Japan’s 2 per cent target. The upshot is the BoJ is likely to continue with its extraordinary monetary stimulus while its counterparts in the US and Europe look to wind back their programs. Metal mania
Industrial metals including copper and aluminium headed for the longest run of weekly gains in more than a decade on investor optimism driven by China, with demand holding up in the largest user just as policy makers press on with reforms that should curb supply. The LME Metals Index had climbed 2.4 per cent in the four days since Monday, and should cap a seventh weekly increase. That would be the longest rally since a nine-week run in 2006, before the global financial crisis from which industrial commodities have since struggled to fully recover.