Summary
- S&P/ASX 200 opens 22 points, 0.3%, higher with materials surging ahead of the rest of the market and info tech lagging
- On Wall Street, the Nasdaq fell most, down 1.7%, while the S&P500 dropped 0.8%, and the Dow Jones fell 0.5 %
- Australian dollar spot price at US78.19¢ ahead of GDP data release at 11.30am
- Brent crude oil down 1.5% to $US62.70 per barrel, West Texas Intermediate down 0.4% to $59.54 per barrel
Materials pull ASX higher
By Lucy Battersby
The S&P/ASX 200 has opened higher and it up 40 points, or 0.6 per cent, to 6802 in the first half hour of trading.
The standout sector is materials, which has jumped 2.3 per cent. It is being pulled higher by dual-listed companies BHP and Rio Tinto. The information technology sector has followed the Nasdaq lower, currently down 1.7 per cent with Afterpay, Xero, and Next DC dragging heavily.
BHP depository receipts closed at a nine-year high of $US80.10 on Wall Street overnight and the ASX-listed stocks at pushing news highs this morning. BHP has gotten up to $50.84 already.
Meanwhile Rio Tinto, which this morning announced its chairman was retiring next year over the Juukan Gorge destruction, was up 1.7 per cent on Wall Street to $US91.84. It touched an all-time high of $130.30 on Tuesday, and is got as high as $130.20 this morning.
Mixed miner South32 is up 4.2 per cent to $2.86, Fortescue is up 3.3 per cent to $22.33, and Ramelius Resources is up 8.3 per cent to $1.31. Gold miners are higher, even though gold is lower at $US1,736.85.
Biggest gains
- Ramelius Resources up 9.13% to $1.32
- Westgold Resources up 5.6% to $1.98
- Gold Road up 4.8% to $1.14
- Perseus Mining up 4.6% to $1.13
- South32 up 4% to $2.85
Biggest declines
- News Corp down 3.5% to $29.29
- Megaport down 3.3% to $12.22
- Orora Ltd down 3.3% to $2.91
- Clinuvel Pharma down 2.8% to $23.92
- EML Payments down 2.7% to $4.95
Nine Entertainment announces new chief executive
By Lucy Battersby
The current chief executive of streaming service Stan has been picked to run the entire Nine Entertainment Company, the largest media company in Australia (and publisher of this blog).
Mike Sneesby will take over from Hugh Marks on 1 April.
Nine Entertainment’s new chief executive Mike Sneesby, formerly chief executive of Stan. Credit:Steven Siewert
Mr Marks was forced to resign last year after it emerged he was in a relationship with a co-worker.
Read the full story from media reporter Zoe Samios here.
Nine’s shares closed at $3.07 on Tuesday, the highest price since the company was floated in 2014. This gives Nine a market capitalisation of $5.2 billion. Seven West Media shares were last at 51¢, with a market cap of $784 million. Meanwhile, Rupert Murdoch’s global News Corp empire has a market capitalisation of $18.3 billion.
Rio Tinto chairman resigns
By Lucy Battersby
Rio Tinto’s chairman Simon Thompson will not seek re-election at the 2022 annual general meeting, the mining giant announced this morning. He told shareholders he was accountable for the Juukan Gorge destruction. Michael L’Estrange will also resign at this year’s annual general meeting.
“The board accepts Simon’s decision and is grateful that he has agreed to provide an important period of stability and support for Jakob (Stausholm, chief executive) and the new executive team ahead of the AGMs in 2022,” senior independent director Sam Laidlaw told shareholders through an announcement this morning.
Mr Thompson has been chairman since March 2018 and has been on the board for seven years. He was previously chairman of Zambia Copper Investments and Tarmac and an executive director of Anglo American.
Mr Thompson said he was proud of Rio Tinto’s achievements in 2020. The company revealed record results recently thanks to soaring iron ore prices and is paying shareholders a generous dividend.
“However, these successes were overshadowed by the destruction of the Juukan Gorge rock shelters at the Brockman 4 operations in Australia and, as Chairman, I am ultimately accountable for the failings that led to this tragic event,” he said.
Rating changes
Courtesy of Bloomberg
- Infomedia: Raised to Outperform at RBC; price target of $1.90, last at $1.44
- JB Hi- Fi : Raised to Buy at Jefferies; price target of $54, last at $45.76
- Mitchell Services: Reinstated Speculative Buy at Morgans Financial Limited
- Avita Medical Inc Rated New Overweight at Piper Sandler; price target for US-listed stocks of $US27, last at $US22.95 (Australian depository receipts last at $5.76)
Wall Street wrap
By Rita Nazareth and Claire Ballentine
(Bloomberg)
Technology shares led losses in the S&P 500 as giants Apple Inc. and Tesla Inc. dragged down the Nasdaq 100 -- with the electric-car maker tumbling more than 4 per cent. Retailer Target Corp. slumped on an underwhelming profitability outlook. Rocket Cos., a Detroit-based holding company, soared after a news report that the stock could become a Reddit target for its high short-interest.
Bullishness among Wall Street strategists is near levels that have presaged potential trouble for stocks, according to a Bank of America Corp. gauge. The measure assesses the average recommended allocation to equities and is close to triggering a sell signal. A valuation methodology, sometimes called Fed model that compares corporate profits to bond rates, recently showed stocks were losing their edge. Earlier Tuesday, China’s top banking regulator said he’s “very worried” about risks from bubbles in global financial markets.
Last week, the correlation between real yields and U.S. equities dropped to its most-negative level in five years. That strong inverse relationship suggests inflation-adjusted Treasury rates have reached a point where further gains could quickly send the S&P 500 lower -- as they feed into steeper borrowing costs and lessen the appeal of other assets. The benchmark gauge of American shares has surged more than 70% from its March 2020 lows.
For Bill Northey, senior investment director at U.S. Bank Wealth Management, rising rates are seen as an important element of what’s “giving investors pause at this point in time.” He also noted that they’re relevant when it comes to figuring out the appropriate level of valuations against the stream of corporate earnings.
“Did we come too far, too fast in pricing in a strong economy and corporate earnings recovery?” he said.
Good Morning
Good Morning and welcome to today’s session of Markets Live.
Your editor today is Lucy Battersby (Alex is on a well deserved break) and it is GDP day today, with consensus estimates that we will see quarter on quarter growth of 2.5 per cent.
This blog is not intended as financial advice.
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2021-03-02 23:38:01Z
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