The ASX looks like starting September with a small loss today judging by the lacklustre end to trading on the futures market overnight Friday.
ASX futures were down by five points on Friday – and there won’t be any real guide until Wednesday because the US is closed tonight for the Labor Day weekend and trading won’t resume until Tuesday.
The higher tariffs on some Chinese imports was due start yesterday (September 1) and up to late last night there was no sign of any late change of heart by Donald Trump.
He said on Saturday the tariff hikes remain and claimed China and the US would meet later this month. Friday’s session on Wall Street was therefore constrained by the imminent tariff hike and the long weekend.
Eurozone shares rose 0.5% on Friday and the US S&P 500 closed up just 0.1% after giving up earlier stronger gains on the back of more trade war worries.
Friday’s solid gain on the ASX though wasn’t enough to offset steep losses earlier in August, as the Australian sharemarket finally recorded its first negative month of the year.
The local market slumped from its record high at the end of July by 6,851, as the US and China escalated their trade war and global interest rates continued to fall with the US Treasuries yield curve inverting for the second or third time in a year, sparking fears a recession was around the corner.
The local June 30 earnings season failed to set the market on fire (See separate story) with weak earnings growth, a fall in non-resource earnings, a 7 year high for the number of companies cutting dividends and more downgrades than upgrades.
The ASX 200 Index closed the month at 6,604.2 after weathering a 208.4 point, or 3.1%, loss.
Led by falling iron ore, coal, and oil, copper and gas prices (see commodities story) resource company share prices came under pressure except for gold miners which enjoyed a solid month.
BHP Group fell 11.2% to by Friday’s close of $36.20, Rio Tinto lost 8.3% to $87.59, South32 slumped 16.2% to $2.63. In contrast, Fortescue shares rose 4.7% to end at $8 after falling heavily in July and early August.
A2 Milk shares slumped 20.8% to $13.56, Bellamy’s Australia dumped 25.5% to $7.52 and Blackmores shares slumped 19% to $71.94 this month. Bega Cheese shares lost 5.6%.
SpeedCast International saw its shares fall further in August losing 58.9% to 77 cents and nearly 90% in the past year. The market is signalling ‘basket case’ for this satellite company.
JB Hi Fi revealed a solid report and the shares jumped 12.5% to $32.90, while Woolies shares rose 5.6%. Shares in the struggling The Reject Shop fell 10% to $1.93.
