Wall St slips, Westpac dividend returns: ASX to dip


The Australian share market is set to dip this morning. On Friday Wall St slipped into the red with the S&P 500 retreating from its record high, led by losses in energy and technology shares. Apple shares dropped 1.5 per cent after the European Union charged the company for breaching its competition rules in the music streaming market. Twitter shares tumbled 15.2 per cent after a weak revenue guidance forecast for the next quarter. Shares in Amazon.com ended down 0.1 per cent, despite posting a record profit while Alphabet and Facebook gave back gains shedding over 1.4 per cent. Despite Friday’s pullback, the S&P 500 and the Dow Jones extended its winning streak for its third consecutive month while the tech heavy Nasdaq completed its sixth straight month of gains. Among the strong earnings results, the US Federal Reserve reaffirmed its dovish comments despite the release of positive economic data, while President Biden announced his US$1.8 trillion American Families Plan. Over the Atlantic, the eurozone fell into its second technical recession in the first quarter of the year on the back of new restrictions to curb the third wave of the coronavirus infections. While in Asia, China’s factory activity growth in April was slower-than-expected though overall conditions remain strong. Oil prices fell 2 per cent while the greenback bounced off its two month lows, as first quarter GDP growth rose by 6.4 per cent along with upbeat data on personal incomes, spending and manufacturing. Back home, investors are preparing themselves for the banks to release their profit results with Westpac to take centre stage today, followed by ANZ on Wednesday and NAB on Thursday along with three AGM’s in the diary which include QBE Insurance, Rio Tinto and Goodman Group.

Figures around the globe

Wall Street closed lower on Friday: Dow Jones Industrial Average lost 0.5 per cent to close at 33,875, the S&P 500 fell 0.7 per cent to 4,181 and the NASDAQ closed 0.9 per cent lower at 13,963.

European markets closed mixed: London’s FTSE gained 0.1 per cent, Paris lost 0.5 per cent and Frankfurt closed 0.1 per cent lower.

Asian markets closed lower, Nikkei lost 0.8 per cent, Hong Kong’s Hang Seng fell almost 2 per cent and China’s Shanghai Composite closed 0.8 per cent lower on Friday.

Back home, the SPI futures are pointing to a 0.1 per cent fall.

On Friday, the Australian share market closed 0.8 per cent lower at 7,026 recording a second weekly decline. Despite this, the ASX200 added 3.5 per cent in April and recorded its best month since November.

Local economic news

Let’s take a look at local economic news, like any start of the month, the first week is a full calendar.

Today the AI Group and IHS Markit are set to issue manufacturing purchasing managers indexes. The Melbourne Institute inflation gauge is also pencilled in along with ANZ job advertisements report for April to be released.

On Tuesday, the Reserve Bank Board will hold its monthly meeting where it’s expected that cash rates will remain at record lows of 0.1 per cent. The central bank will wrap up the week with its quarterly statement on monetary policy with economists expecting an upgrade in growth forecasts and a revised forecast on the unemployment rate. Aside this, the weekly consumer confidence is to be released by ANZ and Roy Morgan. The Australian Bureau of Statistics is set to issue international trade and lending indicators as well.

On Wednesday, the Bureau of Statistics is due to publish building approvals and its “selected living cost indexes” for the March quarter. The AiGroup Performance of Construction index and IHS Markit final reading on services activity is also due out.

On Thursday, the Reserve Bank Deputy Governor Guy Debelle is set to deliver the “Monetary Policy during Covid” speech.

And on Friday, the AiGroup Performance of Services index is due to be released while the Reserve Bank’s economic forecasts take the spotlight when they issue the statement on monetary policy, as mentioned earlier.

Over in the US, investors are on the home stretch with first quarter earnings reporting season with the likes of Estee Lauder, PayPal, Uber and Dropbox due to release figures.

Company news

Westpac’s (ASX:WBC) interim dividend has returned after reporting a better than expected first half cash profit on the back of the economic recovery in Australia and New Zealand. The bank’s revenue from ordinary activities added 1 per cent to $10.7 billion while statutory net profit rose 189 per cent to $3.44 billion. Cash earnings were up 256 per cent to $3.54 billion. Cash earnings excluding notable items rose 60 per cent to $3.82 billion. The bank has declared an interim dividend of 58 cents a share to be paid in June, the first since 2019. Along with the news, after 20 years with the bank Westpac New Zealand chief executive David McLean announced his retirement. Mr McLean will remain in role until 25 June after which Simon Power, general manager institutional & business banking will act as CEO as a global search goes underway. Shares in Westpac (ASX:WBC) closed 0.83 per cent lower at $24.98 on Friday.

Broker moves

Citi rates Resolute Mining (ASX:RSG) as a buy from a neutral with a target price of 70 cents following its update on Thursday (https://www.finnewsnetwork.com.au/archives/finance_news_network338486.html)
iti believes the difference in valuation is due to inconsistent operational performance in the Syama mine in Mali’s, plus the company’s disputed US$70m Malian tax balance. Following the life of mine guidance for the Syama and Mako mines, the broker has upgraded the company but trimmed the price target to $0.70 from $0.75. Shares in Resolute Mining (ASX:RSG) closed 1.02 per cent lower at 48 cents on Friday.

IPOs

There are three companies scheduled to make their debut this week. Keep an eye out on Wednesday for Mineral Oz (ASX:MLG) and on Friday Labour hire and recruitment Hiremii (ASX:HMI) is pencilled in with mineral explorer company Nickelx (ASX:NKL) also in the calendar.

Ex-Dividends

NB Global Corporate Income Trust (ASX:NBI) is paying 0.6963 cents unfranked

Currencies

One Australian Dollar at 8:00 AM was buying 77.22 US cents, 55.89 Pence Sterling, 84.36 Yen and 64.21 Euro cents.

Commodities

Iron Ore has lost 1.4 per cent to US$188.85.
Iron Ore futures suggest a 3.7 per cent fall.
Gold was down $0.60 to US$1768 an ounce.
Silver has lost $0.21 to US$25.87 an ounce.
Oil was down $1.43 to US$63.58 a barrel.

Reminders

Some markets around the globe will be closed due to public holiday. China, the UK and some European markets are closed today while Japan is closed for three days.