The Australian market will open with a positive tone this morning, reversing most of Friday’s surprise sell off after Wall Street ended the day sharply higher and the week roughly flat.
But that disguised early weakness in the early part of Wall Street trading but positive comments from Warren Buffet about Apple (see separate story) reversed that and sent the Dow higher.
The reasonable jobs report for April, a 17 year low for unemployment of 3.9% and no change to the existing 2.6% annual wage growth rate, and then three year highs for oil prices didn’t have the impact analysts might have predicted.
US shares fell 0.2% over the week, but other share markets did a little better with Japanese shares flat, Eurozone shares up 0.9%, Chinese shares up 0.5% and Australian shares up 1.8% – its best weekly performance for 13 months.
As a result ASX 200 futures rose 38 points on Friday night, or 0.6%, pointing to a strong opening this morning for the Australian share market. Investors though should watch for the Westpac interim profit report before trading.
Local investors will also watch the election tax cut and give away budget with some concerns as there will be no attack on debt, even though the end to the budget deficit forecast will be brought forward to 2019.
Wall Street’s solid gains with the S&P 500 up 1.3% came after Eurozone shares rose 0.6% on Friday, gold rose for the day, but fell for the week and oil prices rose as the deadline for President trump to continue the Iran nuclear deal (May 12) approaches.
Friday’s fall on the ASX ended five-sessions of gains, but the week saw the market enjoy its strongest outing m for more than 14-months as the big banks shook off the bad news from the financial services royal commission, with the ANZ and NAB revealing OK interim results that against depended on low debt provisions.
The ASX 200 index fell 35 points, or 0.6%, to 6062, taking the gain for the week to 1.84%, the All Ordinaries lost 31 points, or 0.5%, to 6155.
Macquarie Group’s record 2017-18 profit of more than $2.5 billion and higher dividend helped a little as the shares hit a new all time high well above $108. They closed at $108.01. But Macquarie shares still eased for the week – losing a tint 0.08% in value.
The big four banks though had a weak day – Commonwealth Bank shares fell 1.6% to $72.76, National Australia Bank shares eased 1% 1 to $29.10, Westpac shares lost 0.9% to $29.10, and ANZ shares dropped 0.6% to end at $27.55.
For the week CBA shares were up 1.7%, NAB shares ended 1.8% higher, ANZ shares stood out with a near 3.5% jump and Westpac shares saw a solid 2.8% gain.
AMP shares ended at $4.14 on Friday, up half a per cent on the day and 3% for the week. The market value is back above $12 billion.
But it should be pointed out that Friday’s close is still under the lows of 2009 in the depths of the GFC when the shares traded around $4.30.
Elsewhere Qantas shares jumped nearly 11% over the week higher after the airline said it was on track to report record underlying profit before tax in 2017-18 of between $1.55 billion and $1.6 billion.
Electricals retailer, JB Hi-Fi shares fell 7.9% to $23.52 over the week, however, after the retailer trimmed its net profit forecast to $230 million from a previous forecast of $235 million to $240 million while confirming full year sales guidance of $6.85 billion.
Also on the downside, InvoCare dropped 11.7% to $11.60 after cutting its profit forecasts for the 2018 financial year following weaker funeral sales.
Seven West Media shares soared, ending the week up 27.3% at 70 cents after the Australian Competition and Consumer Commission decided not to oppose the acquisition by Seven West and Nine Entertainment of Network Ten’s stake in the TX Australia joint venture.
Network Ten has vowed to appeal the rulingSeven West shares were given an added boost by Seven Group Holdings chief executive Ryan Stokes who said that his firm’s interest in Seven West Media will hopefully grow, easing fears that the Seven Group could sell out of its media interests.
Nine shares rose 3.1% to $2.45 by Friday and Fairfax shares were up nearly 6.4% at 76 cents. Seven Group shares rose 4% to $19.
