Greetings and welcome to HotCopper’s the ASX Today for Tuesday of Week 9, I’m Jon Davidson. While it looked like we might start the day green, just like yesterday, that optimism quickly faded, and we were back below 9,000pts by lunchtime. The culprit? The great AI scare trade continues to permeate markets.
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So far, the AI scare trade has kept traders around the globe edgy despite a softer-than-expected U.S. CPI read, and despite the U.S. Supreme Court finding Trump’s controversial tariff regime illegal (or at least invalid).
The AI scare trade has outweighed earnings, and it’s also distracting Wall Street from domestic indicators. We got softer-than-expected U.S. GDP data last week, but most people are talking about how low tech stocks can go.
And that’s spreading to Australia. We had one week last week where the ASX did its own thing without looking to America, but that was short-lived. Notably, it was a piece of speculative finbro fiction that helped accelerate fears, showing the pen can still be mightier than the multi-trillion-dollar sword.
In the background, of course, we’ve got the ongoing uncertainty from the U.S. Supreme Court decision around tariffs, but it’s really the tech sell-off stealing the show. There are signs that uncertainty might be settling around tariffs, if not both – gold prices receded from above US$5,200 an ounce in the last few hours. The AUD weakened slightly against the USD, and the VIX index has settled over the last five days, but only slightly, and it actually pared losses since Friday.
A lot of moving parts, probably unlikely to come to a stop for the rest of this week. That said, Oz CPI comes tomorrow, too. Luckily for us, what we can make sense of is domestic earnings. So let’s take a look around the traps:
Woodside (ASX:WDS) came out today with news its profits are down -25% versus the 2024 calendar year; but because it’s still got three massive projects coming online, because it’s positioning itself as an Australian gas major and because the EV revolution hasn’t really seen the internal combustion engine go anywhere, investors weren’t bothered – shares actually climbed higher.
Elsewhere, online retailer Kogan (ASX:KGN) jumped nearly +8% on its earnings report, a further sign of a resilient Australian consumer happy to spend on discretionary, which we also saw in the JB Hi-Fi (ASX:JBH) results last week. Probably no surprise given the Aus unemployment rate remains at record lows.
Finally, Austal (ASX:ASB) fell another -10% on Tuesday in what has been a very volatile few weeks for the Government-backed Australian shipbuilder. Citi analysts today called the stock a sell, one day after its earnings report included an auditor’s report from Deloitte, basically saying they couldn’t verify whether Austal’s earnings projections were entirely concrete. A Citi analyst yesterday also questioned the company’s earnings, pointing to a recent counting error which prompted an internal downgrade from Austal. Can’t they get anything right?
That’s the ASX Today for Tuesday, I’m Jon Davidson, have a terrific evening.
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