The Australian share market is tracking lower for the second day on the back of Wall Street falling, from its record highs. US and local investors are concerned about what Federal Reserve Chair Jerome Powell may say on Wednesday and if the Fed will cut rates later this month after stronger-than-expected jobs reports.
Half of the sectors on the ASX are in the red today with the Healthcare and Information Technology sectors down the most, 0.7 per cent following weaker sentiment in US with after Apple shares lost over 2 per cent, with locally traded Afterpay (ASX:APT) down the most out of our tech majors on profit taking.
The S&P/ASX 200 index is 0.3 per cent or 17 points lower at 6,655. On the futures market the SPI is 30 points lower.
Local economic news
NAB’s business survey for June showed us that the business sector has lost significant momentum over the past year or so. Business confidence largely unwound the bounce in May and while business conditions rose in the month, they remain below average.
It was the first full month post the election and despite the share market trading near all-time highs, business confidence is below average.
Breville Group (ASX:BRG) has been marked as a hold by Bell Potter, with analyst Sam Haddad saying they are waiting patiently for the opportunity to buy. Bell Potter’s price target is $15.50. Bell Potter says BRG’s valuation was a stretch at the stock’s recent highs, at current levels its leaning towards BRG being fair-value. Shares in Breville Group (ASX:BRG) closed 3.9 per cent higher at $16.68.
Australian Prudential Regulation Authority (APRA) looks set to mandate ‘systemically important banks’ including Australia and New Zealand Banking Group (ASX:ANZ), increase their total capital by 3 per cent of risk-weighted assets (RWA) by January 2024. APRA made the recommendation to increase loss-absorbing capacity of ADIs. ANZ’s risk-weighted assets were $396 billion (31 March 2019), and the 3 per cent requirement will involve its capital rising by $12 billion. Shares in Australia And New Zealand Banking Group (ASX:ANZ) are trading 0.9 per cent lower at $27.63 at noon.
PM Capital Global Opportunities Fund Limited (ASX:PGF) released its 30 June 2019 monthly investment report, highlighting that one of its long term holdings, US real estate developer Howard Hughes Corporation, saw its shares rise 20 per cent in the month. Overall its net tangible asset (NTA) per ordinary share (after tax) rose 3.4 per cent from May to June. Its seen 11 per cent in performance since inception (per annum). Shares in PM Capital Global Opportunities Fund Limited (ASX:PGF) are trading 0.9 per cent higher at $1.11 at noon.
PM Capital Asian Opportunities Fund Limited (ASX:PAF) also released its 30 June 2019 monthly investment report, noting that one of its major holdings, iCar Asia saw its shares fall 17 per cent, despite the company strengthening its balance sheet. Overall PM Capital Asian Opportunities Fund's net tangible asset (NTA) per ordinary share (after tax) rose 1.4 per cent from May to June. Its seen 5.5 per cent in performance since inception (per annum). Shares in (ASX:PAF) last traded at $0.94 at noon.
Best and worst performers
The best-performing sector is S&P/ASX Communication Services, adding 0.4 per cent, while the worst performing sector is S&P/ASX Healthcare, shedding 0.7 per cent.
The best performing stock in the S&P/ASX 200 is Speedcast International Limited (ASX:SDA), rising 4.96 per cent to $2.01, followed by shares in Breville Group Limited (ASX:BRG) and Domino's Pizza Enterprises Limited (ASX:DMP).
The worst performing stock in the S&P/ASX 200 is Reliance Worldwide Corporation Limited (ASX:RWC),dropping 4.4 per cent to $3.48, followed by shares in Afterpay Touch Group Limited (ASX:APT) and Cooper Energy Limited (ASX:COE).
Japan’s Nikkei has added 0.2 per cent, Hong Kong’s Hang Seng has shed 0.6 per cent and the Shanghai Composite has lost 0.3 per cent.
Gold and the dollar
Gold is trading at US$1,394 an ounce.
One Australian dollar is buying 69.64 US cents.