The ASX is set to open higher this morning – ASX futures were up 15 points or 0.2% – after the three major Wall St indices all rose sharply overnight, led by financials.
Dow Jones Industrial Average finished almost 619 points higher, or about 2%, while the S&P 500 jumped 1.9% and the Nasdaq Composite gained 1.6%.
The financials sector booked the biggest gains in the S&P 500, gaining 3.2% Monday, led by Wall Street banks JPMorgan Chase & Co (NYSE:JPM) up 6.19% and Citigroup Inc (NYSE:C) up 6.07%.
Here’s what we saw (source Commsec):
- The Euro rose from near US$1.0590 to highs near US$1.0695 and was near US$1.0690 at the US close.
- The Aussie dollar held between levels near US70.85 cents and US71.25 cents and was near US71.05 cents at the US close.
- The Japanese yen eased from 127.35 yen per US dollar to JPY127.95 and was near JPY127.90 at the US close.
- Global oil prices rose by up to 0.8%. Commsec’s Craig James writes, “While global demand for crude continues to outpace supply, failure of the European Union to agree to a ban on Russian oil crimped price gains. At the same time, the US White House is considering tapping the Northeast Home Heating Oil Reserve.”
- The Brent crude price rose by US87 cents or 0.8% to US$113.42 a barrel.
- The US Nymex crude price rose 1 cent to US$110.29 a barrel.
- Base metal prices were mixed on Monday. Nickel, tin and aluminium fell by as much as 0.9%. Other metals rose with zinc up 2%.
- The gold futures price rose by US$5.70 or 0.3% to US$1,847.80 an ounce.
- Spot gold was trading near US$1,852 an ounce at the US close.
- The iron ore futures price fell by 7 cents or 0.1% to US$134.29 a tonne.
Australian market
Albanese heads to QUAD meeting
Just a day into the job, Anthony Albanese will meet world leaders as part of his first Quadrilateral Security Dialogue (QSD) meeting. The new PM landed in Tokyo to meet with leaders from India, Japan and the United States, with China’s aggression in the region firmly on the agenda.
China’s Xinhua news agency reported has reported that Premier Li Keqiang “called” Albanese to congratulate him on his election victory. However, the PM’s office is denying contact has been made.
In his congratulatory message, Li noted “the Chinese side is willing to work with the Australian side to review the past, face the future, uphold the principles of mutual respect, mutual benefit and win-win results.”
Albanese expects difficulties ahead, although is willing to take a less hostile approach.
“The relationship with China will remain a difficult one,” Albanese said after being sworn in and then flying to Tokyo.
“I said that before the election. That has not changed. It is China that has changed.”
China will no doubt see this meeting as the first test of the new relationship.
ANZ lowers home loan rates
In a move against trend, Australia’s fourth largest bank ANZ has reduced the rates for one of its popular variable home loans for new customers.
ANZ cut the variable rate on its Simplicity Plus offering back down to 2.29%. The move comes just two weeks after it raised rates across the board by 0.25% on May 13 for all customers.
ANZ is not the only bank trying to win customers.
Last week, Westpac re-introduced a honeymoon rate of 2.09% for new customers for the first two years, while the CBA's Unloan, launched last week, is a new digital offering with a starting variable rate of 2.14%.
"What these big bank cuts show is that competition in the mortgage market is still alive and kicking, despite the RBA hikes," RateCity.com.au research director Sally Tindall said.
"While most variable customers will now be dealing with higher repayments, some banks eager for new business are handing out exemptions.
"If you're on a variable rate that's on the rise, don't just accept your fate.
"Get yourself a rate cut by switching to a lender willing to put a competitive price tag on your business."
Record dividends
Miners and the big banks are setting new dividend records, pushing them to a high of $98 billion for the 12 months to March, higher than the pre-pandemic records set in September 2019.
"Historically responsible for more than two-fifths of Australian dividends, banking stocks recovered from the regulator-imposed dividend constraints which halted their payouts in 2020, more than doubling in the 12 months to the end of March 2022 to account for a third of the year-on-year increase in total Australian payouts," the Janus Henderson Global Dividend Index reports.
"The increase saw mining assume responsibility for three fifths of the rebound in overall Australian dividends," the report states.
BHP is leading the way.
"Once franking credits are included, the $31.8 billion BHP distributed between April 2021 and March 2022 made it the largest payer in the world by a comfortable margin.
"With another large payment to come later this year, BHP should retain top spot for the whole calendar year."
BHP’s dividend is made up almost one-third of all the dividends paid by Australian companies in Janus Henderson's index.
Australian dividends grew 15% to $25.2 billion during the first quarter.
"Australia's result reflects its continued reliance on banking and mining sectors, and that level of relative sector concentration should be cause for pause among investors," Janus Henderson's Australia head Matt Gaden said.
US markets
Tech stocks rose with shares in Apple Inc (NASDAQ:AAPL) up 4% and shares in Microsoft gaining 3.2%.
So far 474 of the companies in the S&P 500 have posted results. Of those, 78% beat expectations, according to Refinitiv.
European markets
Were also higher.
An Ifo institute survey showed that German business morale unexpectedly rose in May. And in corporate news, Siemens Gamesa rose 6.2% after Siemens Energy launched a 4.05 billion-euro (US$4.3 billion) bid for minority holdings in the wind turbine unit.
Banks rose 2.3% alongside commodity-linked stocks. The pan-European STOXX 600 index rose by 1.3%. The German Dax index rose by 1.4% and the UK FTSE index rose by 1.7%.
In London trade, shares in Rio Tinto rose by 2.1% while BHP shares gained 1.8%.