Christmas has come early for the bank’s shareholders with the decision to slightly increase the 2024 dividend – despite a single-digit decline in the net profit and cash earnings.
Beating the market benchmark is never easy, with 72 per cent of Australian actively managed global equity general funds trailing the S&P World Index in the six months to June 30, 2024. Domestic equity funds performed slightly better, albeit against a significantly lower bar set by the S&P/ASX 200 Index.
ASX drops 1.7% on COVID variant, travel stocks tumble
South African strain spooks markets, Appen smashed, red everywhere
Being the only market trading on Friday, the S&P/ASX200 (ASX: XJO) bore the brunt of the global sell off as news emerged of another, more dangerous strain of COVID-19 found in South Africa.
Potentially resistant to existing vaccines, the news spooked the market sending the market down 1.7 per cent and taking the weekly loss to 1.6 per cent; the third in a row.
Only 14 stocks out of the ASX200 managed to deliver a positive return, with the energy sector the hardest hit, falling 4.6 per cent, as every sector fell.
Over the week, the materials and utilities sectors were the rare beneficiaries, as the iron ore price exceed US$100 per tonne once again.
Naturally, gold rallied amid the volatility with Newcrest (ASX: NCM) gaining 0.8 per cent.
Shares in Appen (ASX: APX) led the market lower, falling 18.8 per cent after Macquarie flagged concerns about the lack of a positive earnings update which had occurred in previous years.
Travel stocks gave up recent gains on the threat of border closures, Flight Centre (ASX: FLT) falling 7.5 per cent and Corporate Travel (ASX: CTM) 5.8 per cent.
Across the week the highlight by far was EML Payments (ASX: EML) which jumped 24 per cent after getting positive regulatory news, with Fortescue (ASX: FMG) also gaining 11 per cent.
Appen also led the weekly losers, down 21.5 per cent, with Technology one (ASX: TNE) also falling close to 14 per cent after a weak update.
Omicron bites, markets fall on variant, oil tanks, value trade rolls
The new COVID-19 variant now has a name with omicron deemed a ‘variant of concern’ by the WHO overnight and the US placing travel restrictions on South Africa and eight other African countries.
Markets did not like the news with the Dow Jones, S&P500 and Nasdaq all down over 2 per cent in what was a Black Friday shortened session.
Energy stocks bore the brunt of the sell off, with the sector down 4 per cent as another round of lockdowns threaten consumption, placing pressure on the popular ‘value trade’.
Financial were next, falling over 2 per cent with American Express (NYSE: AXP) down over 8 per cent.
Naturally travel stocks suffered significant selling pressure, with Boeing (NYSE:BA) down 5 per cent and United Airlines (NYSE: UAL) closer to 10, as travel bookings and hopes of a full return to recovery were dashed.
As has been the case in most recent sell offs, quality and growth have won over ‘value’ sectors with stay-at-home trades including Zoom (NASDAQ: ZM) and Netflix (NYSE: NFLX) seeing the return of investors, adding 5 and 1 per cent respectively.
Healthcare companies, including Moderna (NYSE: MRNA) jumped by over 20 per cent.
The selloff brought losses for the week to 2.7 per cent for the Dow, 2.3 for the S&P500 and 3.1 per cent for the Nasdaq.
Interestingly, Bitcoin has continued its fall, down another 7 per cent amid the volatility, taking losses to 20 per cent in the last few weeks.
W-shaped recovery, we’re not done yet, more pain for AMP
Retail sales once again smashed even the most optimistic forecasts by ‘experts’ rising 4.9 per cent in October, more than double expectations of a 2.2 per cent gain.
They are now 5.2 per cent higher than 12 months ago with a 13 per cent improvement in NSW contributing to 80 per cent of the improvement.
This news combined with the jump in payrolls last week is suggesting a W-shaped recovery from east coast lockdowns is on the cards.
The threat, of course, remains the self-inflicted supply chain bottlenecks, which may struggle to keep up with a surge in demand.
News that the South African strain may be vaccine resistant and significantly more transmissible has shaken confidence across the world, likely placing pressure back on central banks and governments to prepare another round of support.
As with previous lockdowns, the perception that we are nearly beyond the pandemic has clearly come to early, with a lot of water to go under the bridge, so to speak.
AMP (ASX: AMP) remains a real-world example of the difficulty of value investing in the modern day.
Despite many experts suggesting significantly higher value latent in their business, the group announced another $325 million write-down ahead of the demerger of their AMP Capital division.
The $325 million covers defunct technology along with ‘goodwill’ associated with previous acquisitions.
