The big four also had varied fortunes, with Westpac shares gaining 1.7 per cent after the banking giant said its profits rose to $1.8 billion in the June quarter, while National Australia Bank shares gained 1 per cent. Australia’s largest company, CBA, was down 0.3 per cent at midday, at $137.68 a share. ANZ was also tracking down slightly.
On Wall Street on Friday, the S&P 500 rose 0.2 per cent for a seventh straight gain and pulled back within 2 per cent of its all-time high set last month. The Dow Jones gained 96 points, or 0.2 per cent, and the Nasdaq composite added 0.2 per cent.
Treasury yields eased in the bond market following a couple of mixed reports on the US economy. One showed home builders broke ground on fewer projects last month than forecast, which threw some cold water on the market. Optimism had been rising earlier in the week following a flurry of better-than-expected reports on everything from inflation to sales at US retailers.
But a report later in the morning suggested US consumers are feeling better about the economy than expected. That’s a big deal for Wall Street because their spending makes up the bulk of the economy.
Friday’s relatively calm trading capped a manic week where strong economic data helped right Wall Street following a scary run. The S&P 500 had briefly dropped close to 10 per cent below its record last week, as stocks reeled worldwide on a range of worries. Many of those questions are still hanging over the market, just not quite as precariously as before.
The question is whether the slowdown in the economy’s growth will overshoot and become a recession. That’s still to be determined, but the hope on Wall Street is that an expected cut to interest rates at the Fed’s next meeting in September will help forestall that.
The market’s focus will swing next week to Jackson Hole, Wyoming. That’s where Federal Reserve Chair Jerome Powell will give a speech late in the week, and the setting has been home to big policy announcements in the past.
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Because the Fed has said its upcoming moves will depend in large part on what data reports at the time say, “it will be difficult for Powell to pre-commit to a particular trajectory at Jackson Hole,” say economists at Deutsche Bank led by Matthew Luzzetti. But Powell could offer hints about whether the Fed is hoping to merely remove the brakes from the economy through rate cuts or give it an accelerant.
With AP