Market flat despite negative news, bond yields spike, Star CEO steps down

There was little in the way of positive news on Monday, with the market ultimately capitulated to a lack of direction, gaining just six points to start the week.

Just four of the 11 sectors finished higher but among them were the markets two biggest, being materials and financials, which gained 1.3 and 0.6 per cent.

BHP (ASX: BHP) continues to defy expectations closer to over $50 per share once again after gaining 2.3 per cent.

Shares in Star Entertainment (ASX: SGR) gained 0.3 per cent despite CEO Matt Bekier announcing his resignation following revelations of potential breaches to regulations in the groups casinos.

One of the more powerful trends in the market this week, ahead of an early Federal Budget, will be the movements in the government bond yield, an important input into valuations.

The 10-year yield hit the highest point since 2014, ahead of the US, despite vastly different domestic conditions.

The technology sector was sold off in response, down 2.7 per cent behind significant falls in Xero (ASX: XRO) and Dominos (ASX: DMP), down 5.2 and 4.4 per cent.
 
AMP closes sale to Macquarie, Qube sells development property, gold miners struggle
 
Shares in AMP (ASX: AMP) barely moved following confirmation that the sale of their $47 billion Global Equities and Fixed Income asset management division to Macquarie had been completed.

The deal is immaterial to the share price representing just $63 million-plus a potential $75 million in performance-based settlements.

It was a similar story for Qube (ASX: QUB) which agreed to sell an option held over land in Beverage, on Melbourne’s Hume Freeway, to the Commonwealth Government which will seek to develop a rail freight terminal.

The deal includes an option to buy back certain parcels of land for future development.

Shares in the market operator ASX (ASX: ASX) gained 0.4 per cent after the market was informed of a ‘strong likelihood of delay’ in the rollout of their CHESS replacement system that will leverage the benefits of the blockchain.

Whilst once again, the operational risks of commodity producers was on display after Gold Road Resources (ASX: GOR) cut their dividend on a 19 per cent fall in revenue due to production and St Barbara (ASX: SBM) cut production forecasts due to surging COVID cases; shares were down 4.4 and 3.3 per cent respectively.
 
Ukraine peace moves boost market, Tesla’s second stock split, Apple to cut production, Shanghai in lockdown
 
The Nasdaq continued to outperform, taking the two-week win streak into a third week, with Tesla (NYSE: TSLA) a major contributor gaining around 8 per cent.

The Nasdaq gained 1.3 per cent, the S&P500 0.7 and the Dow Jones 0.3.

The company saw a strong rally after management announced the second stock split in two years, overcoming the threat of production cuts due to another lockdown in Shanghai.

It was a similar story for Apple (NYSE: APPL) which finished broadly flat despite falling throughout the day after the company suggested production of their iPhone SE’s in China would be cut by as much as 20 per cent as half of Shanghai is put under new restrictions.

On the positive side, this helped the oil price which was down as much as 8 per cent offering relief to the remainder of the market.

Shares in tobacco sellers Phillip Morris (NYSE: PM) and Altria (NYSE: MO) fell 2 per cent each after Walmart (NYSE: WMT) became the latest company planning to end sales of cigarettes.

Finally, there was positive news from Ukraine with the President open to considering an independent state ahead of talks with Russia in Turkey this week.

Drew Meredith

Drew is publisher of the Inside Network's mastheads and a principal adviser at Wattle Partners.