The Australian share market or S&P/ASX 200 (INDEXASX: XJO) fell modestly on Friday but is expected to post a positive result on Monday morning at the open. BHP Group (ASX: BHP) will be a focal point.
Miners drive ASX 200
The entire iron ore sector fell 4 per cent driven loan by a 9.2 per cent fall in Champion Iron (ASX: CIA), an 8.2 per cent drop in Fortescue Metals Group (ASX: FMG) and 5 per cent from the comparatively more diversified BHP Group Ltd (ASX: BHP). BHP Group Ltd (ASX: BHP) is the largest holding inside popular Australian shares ETFs like the iShares Core S&P/ASX 200 ETF (ASX: IOZ) and BetaShares Australia 200 ETF (ASX: A200).
The energy sector also weakened, down 0.5 per cent, with utilities and real estate the major beneficiaries, gaining more than 1 per cent on the hope of a smaller-than-expected interest rate hike from the RBA on Tuesday.
The Macquarie Group (ASX: MQG) share price closed flat despite reporting a 13 per cent drop in profit to $2.3 billion. Macquarie’s asset management businesses were the hardest hit, with earnings dropping by 15 per cent on 2021’s bumper year, with the market and hedging division up 35 per cent compared to the first half. Macquarie is included in the Vanguard Australian Shares Index ETF (ASX: VAS).
Popular with day traders, the Brainchip Ltd (ASX: BRN) share price fell 21 per cent after reporting another US$3.8 million in quarterly outflows and little progress on their search for profitability.
Among the highlights were Qube Holdings (ASX: QUB) and Vicinity Centres (ASX: VCX) which added 5.1 and 4.3 per cent, respectively. It was a broadly positive week despite the challenging finish with the S&P/ASX200 gaining 1.6 per cent buoyed by real estate, 6.9 per cent, and utilities, up 5.6 per cent.
Apple stock bounces
Retail juggernaut Amazon (NYSE: AMZN) fell 6.8 per cent in Friday’s session after the company guided to a significant slowdown in sales ahead of the holiday season. Amazon reported strong sales growth and the first profitable quarter for the year, but a slowdown in cloud computing and a return to shopping malls is set to hit the final quarter results.
The Amazon result didn’t drag the Nasdaq, which gained 2.9 per cent, leading both the Dow Jones and S&P500 which added 2.6 and 2.5 per cent, respectively. The strong day came after both the inflation reading and wages growth results showed signs of moderating — increasing the likelihood of a slowdown in the torrid pace of interest rate hikes.
Apple Inc (NASDAQ: AAPL) stock was a rare highlight in the technology sector, gaining 7.6 per cent after reporting an unexpected 8 per cent jump in quarterly revenue to US$90.1 billion. The result was driven by a significant jump in Mac sales, which hit an all-time quarter record, but Apple’s services revenue missed expectations. Apple Inc (NASDAQ: AAPL) is one of the largest holdings inside the iShares S&P 500 ETF (ASX: IVV) and BetaShares Nasdaq 100 ETF (ASX: NDQ).
China’s Xi gets another 5 years
All eyes were on China this week with President Xi Jinping finally realising the long-awaited expectation that his term would be extended by another five years, and potentially for the rest of his life. The result was a further weakening in the share market, with US$2.5 billion leaving the market on Monday, as global investors reduce their exposure for the time being.
Despite the headlines, opportunities continue to grow within a region that is set to drive global growth for decades to come.
After coming through 2022 mostly unscathed by the selloff, big tech took a significant hit this week with both Meta Platforms (NASDAQ: META) and Microsoft (NASDAQ: MSFT) selling off heavily as earnings results were weaker than expected. Both Meta and Microsoft stock can be found inside the Global X Fang+ ETF (ASX: FANG). View our report on FANG.
Finally, it was all about Elon Musk once again, with the Tesla founder finally taking control of Twitter and taking the company private in an effort to turn around its flagging fortunes. Musk sacked most key decision-makers within the business as the first course of action.
