Apologies for the intermittent service through the afternoon as your Ed was running around like a chook with his head cut off. Australian shares pushed firmly higher on Friday to their highest close since May after a dramatic night during which investors witnessed the appointment of a new US central bank chief and the release of long-awaited American tax reform legislation.
The moves also brought the benchmark measure to its highest levels since May and once again within striking distance of the elusive point threshold. Investors around the world received confirmation on Friday morning that current US Federal Reserve governor Jerome "Jay" Powell had received the nod to replace current chief Janet Yellen, whose term expires in February.
Analysts and investors took the well-flagged news calmly. A string of earnings updates, annual meetings and strategy days from major ASX companies sparked some sharp moves in share prices over the trading week. Struggling department store Myer , on the other hand, dropped 7 per cent over the five sessions after CEO Richard Umbers revealed disappointing sales figures and slashed targets. Investors fretted whether NAB boss Andrew Thorburn could deliver on his promises, and the shares dropped 2.
Continued strength in the oil price, which has hit multi-year highs, continues to drive the segment higher. That cheer was short-lived, however, as weak retail sales data on Friday immediately dented rate hike expectations and sent the Aussie lower. Bubs is buying NuLac Foods , which gives the company exclusive access to 6. It has also acquired a NuLac products are sold in Coles and Woolworths.
Bubs shares had been in a trading halt for two days and re-commended trading on Friday, with investors backing the strategy. The shares climbed are up 5. Mr Simms said on Friday the solid backing from institutional investors was a good sign. Economists are tapping out their reactions to this morning's retail sales numbers. Continuing price deflation looks to have weighed on the headline number.
Sales were flat in the Sep month following a 0. The consensus forecast for September was for a 0. That left quarterly nominal sales down 0. However, Westpac economist Matthew Hassan points out, that was all due to an estimated 0.
Real retail sales - that is, volumes - were estimated to have risen slightly by 0. He too pointed to price deflation as a key variable. Ferrero is helping fund the project and hopes to see farmers plant 25, acres of hazelnut trees by , from about currently. An Ontario farmer can earn 10 times more per acre from hazelnuts than corn , according to one estimate.
Growers are very optimistic. Retail sales were flat in September. Economists had expected a bit of a payback following the previous month's drop of 0. That is clear in the Aussie dollar , which shed about a fifth of a US cent in response to the ABS release, as the chart below shows.
About aspiring start-up founders and team members gathered at Amazon's Sydney office on Park Street this week. It counts many of our best known companies Qantas, Atlassian and Fairfax Media as clients. At the same time, we see little margin for error on loan losses, capital or the dividend. As such, we think it will underperform in the near-term. The broker's analysts have an "underweight" rating on the stock.
So far they are right - NAB is lower and the others are higher to various degrees. Sorry, we forgot to press the "allow comments" button! Good to go now. Many views may make for a good market, but there is one thing analysts agree on when it comes to NAB: Time to turn to the local market.
The ASX has opened 15 points or 0. We didn't mention it, but gold moved higher overnight on Powell's appointment to the Fed - a vote in favour of a dovish new boss. Missing out in the resources space are recent winners Fortescue down 0. Other bluechips are helping the benchmark sharemarket measure inch towards points tired of that talk yet? CSL is up 0. The stock weighing the most are the two companies that announced yesterday plans to invest in digitalisation now for cost saving later. NAB is off 0.
Nothing dire, but interesting nonetheless. The morning's worst performers are Nanosonics , down 2. Overnight there was bad news about how US states could expand their lawsuit against generic drug company Teva, from whom Mayne bought a portfolio of drugs earlier this year.
Quietly, commodity prices have been going nuts. Metals prices are climbing, with nickel hitting five-year highs.
There's also been good news for our energy players and their massive LNG projects. Overnight oil closed at the highest level in more than two years as OPEC's two biggest members publicly endorsed an extension of production caps that have eroded a worldwide glut. Futures rose by 0.
The latest development overnight is that oil chiefs from Saudi Arabia and Iraq expressed confidence the historic accord between OPEC and other major crude suppliers that has trimmed stockpiles will be extended beyond its March expiration. Oil has climbed more than 15 per cent since the beginning of September on signs that global supplies are tightening and the Organisation of Petroleum Exporting Countries and allied producers may extend their efforts.
In the US, crude stockpiles slid to the lowest level since January last week, according to an Energy Information Administration report on Wednesday. Saudi Oil Minister Khalid Al-Falih said in Bangkok that he expects "improving market conditions to continue, and as my colleagues in OPEC and non-OPEC gather in four weeks in Vienna, I expect that we will renew our resolve to return alreadyimproving global inventories to their normal levels.
The list of themes that can hearten global sentiment through the final session of the week is short, but it does include the ever-popular change in US payrolls. US monetary policy has dominated the entire second half of this week. However, the nature of that event was defused given the market's clear expectation for its outcome. No hike in November but maintenance of a very high probability 98 percent according to Fed Fund futures chance of a move at the December 13 meeting.
That wouldn't be the end of it however. The longer-term view of US policy and its early carry currency status will be heavily influenced by who is leading the group. That stewardship will be under Jerome Powell starting next year after US President Trump announced his choice following weeks of speculation. Powell rarely deviated from Yellen's vote and differs most clearly when it comes to regulation — he supports deregulation. And of course, the final trading day of the week brings the States' monthly payrolls.
Always good for volatility, but its dubious that this figure can materially alter the outcome of the next policy meeting much less pace for the next two years. As we sprint towards the ASX open, here are the overnight market highlights in numbers:. And rumbling on, the other big bit of news overnight was the Bank of England's first rate hike in a decade to a lofty 0. The BoE policymakers managed what is widely referred to as a "dovish hike", by simultaneously talking down the chance of further tightening from here, as the fret over the potential impact of the stumbling Brexit negotiations.
The minutes underscored worries that the economy is fragile as the split with the European Union nears. Crucially, policy makers omitted language from previous statements saying that more hikes could be needed than the markets expect. That implies that officials are comfortable with pricing for two more quarter-point increases, roughly one by late next year and another in NAB economist David de Garis's takeaway line from the BoE was that "any further hikes are to be at a gradual pace and limited extent".
Here's her comment in full:. Our view is that this hike was an odd decision. The BoE had painted itself into a corner by talking up the possibility of a November hike, having gone back on its word too often in recent years.
It may have been intended to put a floor under sterling and fire a 'warning shot' against some pockets of excessive credit build-up. It may have been a way of placating the more hawkish elements on the board, knowing that one hike alone is unlikely to have a material impact on the economic outlook.
However, with the UK already slowing and Brexit likely to have a significantly detrimental impact on domestic demand, it is hard to see the BoE hiking again for a long time. So a new Fed chair and the arrival of long-awaited tax legislation. To be fair, Powell as the new Fed boss had been essentially leaked in the preceding days, and investors have decided that his appointment means more of the same, softly-softly approach to monetary policy tightening.
Then again, markets didn't respond much to Paul Volcker's appointment in August , either. US stocks eked out a gain in the final half hour of trading, the US dollar actually fell! The big dollar's move helped push our currency firmly higher to last fetch US Investors parsed the tax plan details for winners and losers, giving a boost to small caps on speculation they will benefit most from a proposal to cut the corporate tax rate.
Facebook lost more than 2 per cent after earnings disappointed , weighing on tech shares. It didn't help that founder Mark "Man of the people" Zuckerberg said he would spend big to address weaknesses in the platform that allowed Russian political meddling in last year's election. And here's the other big news: Congressional passage of this legislation that would affect nearly every US company and family was far from certain, and some business groups quickly came out against it.
A number of provisions would hit taxpayers in Democratic-leaning states hardest, like rolling back deductions for state and local taxes and cutting in half the popular mortgage interest deduction. The legislation, called the Tax Cuts and Jobs Act , produces new advantages for rich Americans through lowered corporate taxes, phasing out the estate tax and dumping the alternative minimum tax.
Are we going to let the defenders of the status quo win and see our country continue down this downward spiral? Meeting with Ryan and other key House Republicans, Trump told the lawmakers he was counting on them to maintain the momentum for tax cuts, and repeated his request that Congress send him the legislation to sign into law by the Thanksgiving holiday on Nov. That is an ambitious timetable for such a long, multi-faceted piece of legislation that will face a ferocious lobbying battle among business sectors affected by the bill and fierce opposition from many Democrats.
So much news overnight, but let's start with perhaps the most important development: Powell, appointed to the Fed board in by then-president Barack Obama, emerged as Trump's choice from a five-person slate of possible nominees that included Yellen as well as others who would have represented a sharp change in monetary policy.More...