ASX on track for five week winning streak

Every sector was up except the heavyweight material/mining space, which was down 1.51 per cent, and utilities, which were flat.

BHP was down 1.92 per cent to $47.91, Rio Tinto fell 2 per cent to $122.94 and Fortescue Metals retreated 1.3 per cent to $21.95.

All the big banks were higher, with ANZ leading the pack, rising 2.34 per cent to $25.75.

IAG was down 2 per cent to $4.73 after warning that last weekend’s flooding in Auckland and claims inflation would hit its bottom line.

The lowdown:

A shift in the market mood has created a flurry of upward activity spurred on by the US Federal Reserve’s mild interest rate rise and Jerome Powell’s comments on inflation easing. However, it’s not likely the RBA will take its the foot off the rate-rise pedal just yet, said one market analyst.

“We had a real shift in tone in markets this week,” said market analyst Jessica Amir from Saxo Markets.

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“Most of the S&P 500 companies that have reported their earnings have actually declined and we saw some of that start to come through from the biggest tech stocks globally like Apple, Amazon, Google,” she said.

While, the tech giants took losses led by Australian software giant Atlassian losing 13 per cent, the road ahead is going to bumpier and this could mean a cautious approach for the RBA when they meet next week.

Meta jumped after it reported better revenue for the latest quarter than analysts expected and said it expected to spend less this year than earlier forecast. While its latest profit fell short of expectations, Facebook’s parent also announced a program to buy back $US40 billion ($56 billion) of its stock.

“The markets are really sensitive and vulnerable of pullbacks on the short term. The RBA meets next week, and they’re probably going to keep their foot on the gas for a little bit longer than the Fed because our inflation continues to beat expectations,” Amir said.

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Meanwhile, dairy giant Bega Group’s suffered close to a 4 per cent slide after issuing a statement to the market that outgoing chief executive Paul van Heerwaarden would be finishing up his role today. The company had flagged last October that van Heerwaarden would be stepping down “in the coming months”, but did not provide a specific date.

“The company and Paul have now agreed that Paul will resign his position today … with Pete Findlay being appointed as chief executive officer, effective immediately,” Bega said in a statement.

On Wall Street, the S&P 500 rose 1.5 per cent to continue its bumper week, the Dow dipped by 0.1 per cent and the tech-heavy Nasdaq composite jumped by 3.3 per cent, with Meta soaring by 23.3 per cent. But in after-hours trade, disappointing results from Apple, Alphabet and Amazon weighed on sentiment.

A day earlier, stocks and bonds took off after Fed chair Jerome Powell said the central bank was finally starting to see progress in its battle against inflation. Markets took that as a sign a pause may indeed be imminent, and investors even raised bets for cuts to rates late this year.

Wall Street will keep a close eye Friday’s US jobs report, where economists expect to see a slowdown in hiring. The job market has largely remained resilient even in the face of swift rate rises by the Fed over the last year.

Quote of the day:

After Atlassian took a 13 per cent fall in its share price in after-hours trading, its co-founders had some words.

“We’ve played offence amid uncertainty more than once in our 20 years as a company, and we’re confident that our trademark vigilance and discipline will guide us through successfully once again,” Mike Cannon-Brookes and Scott Farquhar wrote in a letter to shareholders.

Tweet of the day:

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