ASX Plunges After Fed Chief Jerome Powell Scares Markets

Rate-sensitive stocks such as those in the tech sector took a hit with shares of Xero and “market darling” WiseTech falling 5.84% and 4.9% respectively.

Andrew Forrest’s Fortescue delivered its second-largest net profit of $6.2bn ($9bn) after shipping a record 189m tonnes of iron ore out of the Pilbara.

But despite what Dawes says is a “very good result and a fantastic dividend,” the mining company is down 4.78 percent in today’s market.

“It’s certainly been quite difficult for the market to gain any kind of traction right now,” Dawes said.

Meanwhile, jewelry retailer Lovisa’s results were the happy surprise on Monday, up nearly 60% for 2022, with net profit after tax up 116.3% to $59.9m.

“That shows that potentially that discretionary market is looking very, very good … which means that some discretionary money is still alive and well,” Dawes said.

Those retail results stem from ABS data released on Monday, which showed that retail trade rose 1.3% on a monthly basis in July, an increase of 16.5% compared to July 2021. This was higher than the expected increase of 0.5% expected by the CBA. , and it is the seventh consecutive month that retail trade has risen.

“Overall, inflation remains very stubbornly high and will continue to be. One would think that over a longer period it might start to decline as interest rates start to rise, but as we saw with Commonwealth Bank the other day, 70 percent of their customers have more than two years of mortgage payments saved. , which shows there is a lot of resilience in the market,” Dawes said.

Another win of the day was a2 Milk, which was up nearly 8 percent at $5.30 in early trading today.

The jump came as the milk and infant formula marker outlined a renewed focus on rebuilding its pandemic-hit Chinese daigou community and announced a share buyback of up to $NZ150 million ($133.6 million).

“This was a fantastic result with the buyback coming up and, and I think that’s why the market really liked 2 Milk,” Dawes said.

Dawes expects energy and mining stocks, which have kept the Australian equity market outperforming other international equity markets in recent weeks, to remain resilient.

“Obviously we are a commodity based market, but certainly any kind of pullback is going to be healthy for companies like BHP, Rio Tinto and Fortescue at the moment as they have had a fantastic run.”

Tweet of the day:

Quote of the day:

“Adore Beauty also faces inflationary pressures around employee costs, freight and marketing, and consumer confidence is more subdued,” the e-commerce company told investors, after revealing that trading in the first seven weeks of the new financial year was down 28 percent at this time last year.

with AP

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