Crushed iron ore being transferred into a bulk cargo ship. Source: Adobe Stock
The Market Online - At The Bell

Join our daily newsletter At The Bell to receive exclusive market insights

It was, overall, a lacklustre week for the ASX.

We only saw one green day on Thursday when US inflation dropped in-line with expectations. Despite US producer prices coming in cooler than expected overnight on Friday, the ASX ended the week with a red day.

Both the NASDAQ and the S&P 500 reached fresh all-time highs for the fourth day in a row on Thursday night Australian time.

For a national bourse that is well-known for being infatuated with US markets, the good mood in the room over in the States has failed to catch on in Australia in recent weeks. This week made that very clear.

Last week, we got interest rate cuts from the ECB and the Bank of Canada. I said that would lead to good sentiment, and that’s partially true for the US (once you look past the juggernaut that is NVIDIA.)

But little old Australia just isn’t feeling it. There were reports this week published by The Australian suggesting some sources believed large offshore investors had moved billions out of Australian markets in Week 24, causing the drops we’ve seen this week.

Those reports remain somewhat vague, and also fail to consider plummeting iron ore prices which drive BHP stocks up and down ­– lately, down. 

So what does this mean? “Sell in May and go away” is true for Australia, but not for America? That wouldn’t be entirely surprising ­– the US market story we’re seeing right now is steeped in the context of our curious historical-economic times. 

Only the world’s largest stock market could pull off what the S&P 500 is pulling off lately, and it’s also largely because of the right-place-right-time factor tech stocks are the clear beneficiaries of.

But it wasn’t all bad news on the ASX this week.

Droneshield shares hit fresh all-time-highs on Friday; as did a number of ASX-listed ETFs tied to US markets. 

Citigroup remains bullish on copper, seeing prices at US$12,000/tn in late 2024; and Telix shares managed to rise on Friday even after the pharmaceutical heavyweight bailed on its US IPO.

Notably, Telix blamed “current market conditions” for abandoning the Morgan Stanley-backed proposed $300M NASDAQ listing – but that doesn’t make much sense. 

Market conditions in the US are unprecedentedly good right now. That story doesn’t really add up. 

At any rate, next week will be a big one. The RBA releases its latest interest rate decision on Tuesday at 2.30pm AEST, consensus is for another pause. Commonwealth still sees a rate cut in November, but ANZ aren’t so sure anymore. That bank has pushed out its forecast to February of 2025. 

But don’t let that stop you from having a great weekend! See you next week. 

Economic News 

  • Markets bake in expectations for US Fed rate cut in September 
  • Australian unemployment dips back to 4% flat
  • Japan is skirting on the edge of recession; latest QoQ GDP down -0.5%
  • Chinese MoM inflation sees country back in deflationary territory 
  • Iron Ore prices continue to languish under US$110/tn at Singapore & Tianjin

Equities News from HotCopper

Telix Pharma ditches NASDAQ IPO plans despite record run for US markets

ACCC flags competition concerns with Chemist Warehouse reverse ASX listing

Green Critical Minerals takes Hexagon Energy to court for unclear reasons

More From The Market Online
The Market Online Video

ASX Market Update: Bourse surrenders gains | 19 July 2024

The ASX is down 1% as the market falls back below 8000 points after record highs…
The Market Online Video

ASX Market Close: Index finishes the week lower | 19 July 2024

In market close this afternoon we are discussing Droneshield, Universal Store Holdings, Flynn Gold, Lifestyle Communities,…