The disconnect is not about the big technology companies themselves, the famed value investor believes. It wasn’t in 2,000 and it isn’t now. The disconnect is about their valuations.
Private credit has seen huge inflows in recent years, but contrary to the claims made by some of its advocates it’s not a defensive asset class or a substitute for investment grade corporate and sovereign bonds.
Strike action pushes LNG price higher
The Australian share market rose in a muted fashion on Thursday, assisted by the energy sector as a potential strike by Western Australian gas workers helped to cause a spike in European gas prices.
The benchmark S&P/ASX200 index finished 19.4 points, or 0.3 per cent, higher at 7,357.4, while the broader All Ordinaries index was up 25.1 points, also 0.3 per cent, at 7,568.5.
The ASX’s energy sector had its best day in two months on Thursday, rising 2.3 per cent after European gas prices soared 40 per cent overnight, the largest jump since Russia’s invasion of Ukraine, on the back of news that Chevron and Woodside Energy workers at gas platforms off the coast of WA had voted to strike next week. The proposed strikes at the three liquefied natural gas (LNG) platforms could curtail about 10 per cent of global exports of the fuel, and cause a fresh energy shock across Asia and Europe.
With gas prices spiking, Woodside Energy rose 71 cents, or 1.9 per cent, to $39.00; and Santos gained 20 cents, or 2.6 per cent, to $8.05. In coal, Whitehaven Coal finished 31 cents, or 4.3 per cent, higher at $7.45; New Hope Corporation lifted 32 cents, or 5.8 per cent, to $5.88; Yancoal Australia gained 24 cents, or 4.8 per cent, to $5.20; Stanmore Resources added 14 cents, or 5.1 per cent, to $2.87; and junior Bowen Coking Coal jumped 2.7 cents, or 29 per cent, to 12 cents, after reporting strong shipping performance and a 45 per cent upgrade in the resource estimate at its Hillalong South project in Queensland.
AGL Energy fell 36 cents, or 3.1 per cent, to $11.22 after reporting a full-year statutory loss of $1.26 billion as it wrote down the value of its coal-fired power plants after moving up plans to close them.
In the bulk mining sector, BHP gained 28 cents, or 0.6 per cent, to $45.78; Fortescue Metals rose 29 cents, or 1.4 per cent, to $21.47; but Rio Tinto dropped $3.20, or 2.8 per cent, to $109.65.
In lithium, producer Pilbara Minerals rose 8 cents, or 1.5 per cent, to $5.37; and fellow producer Allkem gained 28 cents, or 2 per cent, to $14.50. Lithium project developer Lake Resources spiked 4.5 cents, or 27.3 per cent, to 21 cents. At one stage, Lake was up 35 per cent, all because the company told the market that company executives will provide details about its flagship Kachi project at a lithium seminar in Argentina, where the deposit is located. The ASX had asked for further details of the company’s claims around Kachi.
AMP back in favour
In the industrial arena, cement producer Boral surged 37 cents, or 8.7 per cent, to $4.74, after reporting a 17.1 per cent jump in full-year revenue, to $3.46 billion. Insurance broker AUB Group rose $1.68, or 6.3 per cent, to $28.58 after upgrading its full-year guidance. But construction and engineering company Downer EDI lost 28 cents, or 6.4 per cent, to $4.10 after posting a net loss of $386 million, and warning of “challenging” market conditions over the next six months.
Three of the Big Four banks retreated after Wednesday’s gains. Commonwealth Bank fell 38 cents, or 0.4 per cent, to $104.47; National Australia Bank dipped 4 cents to $28.60; and ANZ was down 3 cents, to $25.40; but Westpac advanced 7 cents, or 0.3 per cent, to $22.14.
AMP rose 5 cents, or 4.6 per cent, to $1.15 after the financial services company announced a first-half profit of $112 million, in line with a year ago.
Luxury online retailer Cettire surged 34 cents, or 12.1 per cent to $3.14, after reporting that it made an adjusted full-year operating profit of $29.3 million, after a $21.5 million loss the year before.
US inflation boosts “soft landing” hopes
In the US, the consumer price index (CPI) inflation report for July showed an annual rate of 3.2 per cent, up from 3 per cent recorded in June. The core rate, which excludes the volatile food and energy components, came in at 4.7 per cent. The increase in the headline rate was driven by rising housing, car insurance and food costs.
The inflation report was softer than expected, and the blue-chip Dow Jones Industrial Average added 52.79 points, or 0.15 per cent, to finish at 35,176.15, helped by Disney, which rose 5 per cent. The broader S&P 500 gauge eked out a 1.1 point gain to 4,468.83 and the tech-heavy Nasdaq Composite index gained 15.97 points, to 13,737.99.
In the bond market, the benchmark US 10-year yield increased 10.6 basis points to 4.11 per cent, while the 2-year yield moved 3.4 basis points higher, to 4.838 per cent.
Gold eased US$4.53, or 0.2 per cent, to US$1,912.15 an ounce, while the global benchmark Brent crude oil grade lost US$1.15, or 1.3 per cent, to US$86.40 a barrel, and US West Texas Intermediate oil appreciated by 5 cents, to US$82.87 a barrel.
The Australian dollar is buying 65.15 US cents this morning, down from 65.57 US cents at the ASX close on Thursday.
