The local currency was 0.4 per cent higher, holding above US66¢; the Bloomberg dollar spot index slipped.
On bitstamp.net, bitcoin was 5.2 per cent higher to $US29,682 at 7.07am AEST.
The yield on the US 10-year note rose 7 basis points to 3.52 per cent at 4.59pm in New York.
On Wall Street, the VIX tumbled 9.6 per cent lower to 17.03. The NYSE Fang + Index lifted 3.8 per cent, bolstered by Meta’s surge. Communication services advanced 5.5 per cent, pacing all 11 S&P 500 industry sectors higher.
The tech sector’s rally more than offset the release of disappointing first-quarter GDP data that pointed to a faster-than-expected slowdown in the US.
Gross domestic product increased at a 1.1 per cent annualised rate last quarter, the government said in its advance estimate of first-quarter GDP growth. The economy grew at a 2.6 per cent pace in the fourth quarter. Economists polled by Reuters had forecast GDP rising at a 2.0 per cent rate.
Private inventory investment declined at a $US1.6 billion pace, the first decrease since the third quarter of 2021. The drop, led by wholesalers and manufacturers, followed a $US136.5 billion rate of increase in the fourth quarter.
Today’s agenda
Local: March private sector credit and first quarter PPI at 11.30am AEST; NZ April consumer confidence
Overseas data: Japan March industrial production, Bank of Japan policy meeting; Eurozone first quarter GDP, German April CPI; UK April nationwide house prices; US first quarter employment cost index, March personal income, spending and PCE Core deflator, April Chicago PMI, April consumer sentiment final
Other top stories
Migration review cuts temporary workers Labor will increase the protections offered to the lowest-paid migrants, while making it significantly easier for employers to hire middle-to-high paid skilled foreigners.
Chanticleer: Ten investment ideas for choppy markets The Alpha Live conference provided a plethora of ideas about what investors should buy and what they should avoid. Here are 10 of the best.
Future Fund outperforms super in March quarter The result comes as CEO Raphael Arndt warns that equity markets were showing a worrying lack of concern about economic headwinds.
‘Sticky’ inflation and weak growth are a trap for markets Some of the country’s top investors say everything from wage rises to strong business activity will make it harder than expected for rates to fall.
How MilkRun stopped the VC funding free-for-all This week in The Fin podcast, technology reporter Jessica Sier on why MilkRun closed its doors, how its failure marks the end of an era of easy money for start-ups in Australia and what that means for aspiring entrepreneurs.
Market highlights
ASX futures up 56 points or 0.8% to 7346 near 6.45am AEST
- AUD +0.4% to 66.30 US cents
- Bitcoin +5.2% to $US29,682 at 7.07am AEST
- On Wall St: Dow +1.6% S&P +2% Nasdaq +2.4%
- In New York: BHP +1.2% Rio +1.2% Atlassian +1.3%
- Tesla +4.2% Apple +2.8% Amazon +4.6% Meta +13.9%
- Alphabet +3.8% Microsoft +3.2% eBay +5.1%
- Stoxx 50 +0.2% FTSE -0.3% CAC +0.2% DAX +0.03%
- Spot gold -0.03% to $US1988.42/oz at 2.32pm in New York
- Brent crude +0.6% to $US78.14 a barrel
- Iron ore -1% to $US104.15 a tonne
- 10-year yield: US 3.52% Australia 3.37% Germany 2.45%
- US prices as of 4.59pm in New York
Goldman preview of Australia’s reporting season
In a note, Matthew Ross, Bill Zu and Tony Wu said: “Despite positive sales results, margin misses were the key driver of earnings downgrades during 1H results.
“Looking at overall earnings trends, three quarters of sectors have now seen an upward revision to consensus sales forecasts this financial year, but despite this strong top-line momentum, all 10 industrial sectors have seen downgrades to margin forecasts. We expect this pattern will continue as we enter the May/June “Confession season” and firms revise full-year guidance to take into account 3Q trading activity.
“While analysts have already revised margin forecasts lower across the board, thus potentially limiting large downside surprises into year-end, there are still a number of stocks where consensus forecasts imply a strong improvement in margins that might be challenging to deliver in the current environment.”
More specifically:
ASX 200 Industrials who despite having seen downgrades to operating margins over the past 6-months are expected to deliver stronger 2H EBITDA Margins (vs their average over the past 2 halves).
On this list: Corp Travel, Flight Centre, Austal, PWR Holdings, Domain, Seek, Netwealth, Bega Cheese and Boral among others.
Stocks that have yet to disappoint on margins, where assumptions around profitability levels already appear conservative given recent trends
ASX 200 Industrials with 1) a stable or increasing trend in consensus profit forecasts, 2) 2HFY23 margin assumptions either below or in-line with their LTM average
On this list: IDP Education, JB Hi-Fi, Breville, IPH, Harvey Norman and Super Retail among others.
United States
Pressure is building on President Joe Biden to respond after House Republicans unified on a set of demands to avert a catastrophic US debt default in the coming weeks.
The deadline for a deal is about to come into sharper focus, clarifying the ramifications for the financial markets even as the two parties remain deeply polarised over whether to require spending cuts in any agreement to raise the US debt limit.
**
Activision Blizzard chief executive officer Bobby Kotick called UK regulators’ decision to block Microsoft’s $US69 billion acquisition of his company “irrational” and predicted the deal will ultimately win approval.
In a Bloomberg Television interview, Kotick didn’t say whether the companies would extend their purchase agreement beyond a July deadline. The pair are preparing their response to the UK decision, he said, adding, “I think the appeals process will work in our favour.”
