The Australian Bureau of Statistics (ABS) has released Australia’s latest retail data, showing growth is up +1.3% over the last year. The month-by-month read, however, came in lower than expected, at 0.1% for April versus expectations for 0.2% growth. While the miss was small, the data does indicate a weakening Australian consumer, despite being a sometimes volatile data series.
The data indicates that, economy-wise, inflationary pressure in the sector could be slowing, which has contrary implications for a market pricing in a RBA cut closer to 2025. Still, the data wasn’t enough to recover market sentiment. Sentiment stayed flat all week, with a green Friday offering some relief.
Australian CPI being 0.2% higher than expected triggered a -1.25% loss on the ASX200 the day it came out. Talk about nervous energy.
As for the the ASX, one stock that grabbed my interest this week is Playside Studios (ASX:PLY), which has risen back to its former glory after a deal with Warner Bros struck in late 2023 appears to have come good for the company. It’s developing a Game of Thrones-themed game on its platform and this was enough to kick up a perhaps surprising boost of support from traders.
Meanwhile, Morgan Stanley has unveiled its list of “overlooked” ASX AI stocks, but the list isn’t eye-opening to anyone paying attention. Think NextDC.
At the same time, in the US, Dell shares tanked -17% Thursday night after the IT products giant revealed the price of offering AI to the market is getting more expensive, ultimately hurting margins.
Looking to international markets, something interesting happened this week: the S&P 500 diverged from NVDIA’S share price. In recent history, the price chart for the entire S&P500 and the price chart for NVIDIA have basically been identical. Not anymore.
The index is tanking while NVIDIA continues to soar – this comes at the same time Fundstrat has declared Google owner Alphabet is the most compelling Mag7 stock at this time.
Doom alert: Macquarie says they’re expecting US markets to correct in June, and Goldman Sachs have their doubts about Chinese market performance in the foreseeable future. Chinese factory activity also slipped into contractionary territory late in the week, though, only by a marginal factor.
HSBC says commodities are on the cusp of a ‘super bull rally,’ and they aren’t alone. While metals prices got hit this week – no doubt, US GDP being revised downward to 1.3% from 1.6% helped quell expectations of booming demand – it’s largely profit-taking being blamed.
Keep an eye on copper to get an idea for what metals, broadly, are facing sentiment-wise.
Australian Equities
- Playside Studios shares hit 27mth high in somewhat obscure comeback story
- AngloGold Ashanti moves in on Kincora Copper days after Ecograf earn-in deal
- Energy Transition Metals reiterates compo claim for 4x Greenland’s GDP
- Fortescue dips more than -3% on Wednesday as Jarden rates underweight
- Morgan Stanley reveals its picks for AI ASX stocks potentially overlooked
Australian Economy
- Australian renewable energy projects are stalling as wind and solar drought permeates
- Australia’s construction insolvency crisis is only getting worse
- ASX200 sinks -1.25% as Oz CPI inflation comes in 0.2% hotter at +3.6% YoY
- BetaShares reduces RBA 2024 rate cut forecast down from 2 cuts to a single revision
- ABS retail data for April shows +0.1% growth MoM; +1.3% YoY, lower than expected
- EU and Aus ink crit minerals agreement – but Germany, France warmer on China
- Some east-coast real estate agents report Chinese buyers selling off Oz property
International Equities
- The S&P 500 and NVIDIA’s share price has diverged considerably
- NVIDIA’s market cap closing in on Apple’s
- Dell falls -17% as it flags the cost of AI is rising, impacting margins
- Goldman Sachs calls into question sustainability of Chinese stock performance
- Macquarie says the US stock market is set for a June correction
- Google owner Alphabet the most compelling Mag7 stock: Fundstrat
International Economies
- China’s latest batch of property stimulus measures have failed to spur short-term sales
- China factory activity slips into contractionary territory as troubles persist
- ECB appears ready to cut rates in June, beating Fed to the punch
Commodities
- HSBC calls a “super bull” rally for commodities is looming
- Copper down nearly -2.5% WoW
- EU natgas futures are up nearly 21% over the last month