The Australian share market or S&P/ASX 200 (INDEXASX: XJO) continued its recent weakness with ASX Reporting Season a key drag on performance.
Global investors continue to digest the BHP Group Ltd (ASX: BHP) dividend and profit result, with the BHP share price falling another 6.4% on Thursday, all but closing the premium to their London listed shares. This is likely a surprise to management who would have expected the opposite. The result was the materials sector falling 3.7 per cent and dragging the ASX 200 down 0.5% for another day.
Elsewhere it was a mixed day with consumer discretionary rallying 1.5 per cent behind the likes of Redbubble Ltd (ASX: RBL) and healthcare up 2.0 per cent as CSL (ASX:CSL) jumped 3. 2 per cent. Origin Energy (ASX: ORG) delivered a previously flagged $2.3 billion loss behind an 8% contraction in revenue which sent shares down 4.1%. That said improving energy prices are beginning to feed through which supported a solid if not surprising dividend of 7.5 cents per share.
Redbubble led the market adding 18%, however, it remains down over 50% from its 2020 high. The group reported a 58% increase in marketplace revenue to $533 million and a tenfold increase in earnings to $53 million. Profit was just $31 million as margins remain challenged and last year’s face mask dominated sales growth becomes hard to follow.
Snoop Dogg & Treasury Wine Estates
Australia’s unemployment rate dropped to its lowest level since 2008, hitting just 4.6 per cent in July. Whilst the headline suggests good news, it couldn’t be further from the truth with the result driven by a 1% fall in the participation rate as more people gave up even looking for work.
The economy is teetering and clearly lacking government support as lockdowns spread across the nation.
Treasury Wine Estates Ltd (ASX: TWE) appears to be navigating the year from hell reasonably well, reporting a flat result in 2021 with revenue remaining at $2.68 billion despite a near-zero result from China. TWE profit actually increased 2% to $250 million with the dividend increase from 8 to 13 cents per share. TWE shares fell 1.5% on the news.
Newcrest Mining (ASX: NCM) shares and its results benefitted from strength in the gold price and a falling Australian dollar, seeing profits increase 55% to $1.2 billion. It was driven by record production of copper and gold, seeing cash flow hit $1.1 billion and moving on from the issues of the 2010s. Management doubled the dividend to US 40 cents per share.
US stock market under pressure & big China weakens
US stock markets weakened once again as the Federal Reserve minutes suggested tapering of bond purchases may go ahead despite a clear weakening of the economy.
The tech sector outperformed with the Nasdaq heading 0.1% higher behind Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) whilst the Dow Jones dropped 0.2% as the correction in oil prices continued.
A strong unemployment result shocked the market as did news that the Chinese government was seeking to crack down on the treatment of delivery drivers and look more closely at live streaming. Alibaba (NYSE: BABA) and Tencent (HKG: 0700) shares were down 7% and 3%, respectively. Chipmaker NVIDIA (NASDAQ: NVDA) offered a market update reporting a fourfold increase in quarterly profit to US$2.37 billion, on the back of record revenue of US$6.51 billion, up 68%.
Gaming chip sales continue to drive performance, improving 85% in the quarter, with management noting they have enough supply to meet their fourth-quarter growth demands by 2022 may be more difficult. NVDA shares were up 4%.
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