The laggards

Investors in the nation’s supermarkets haven’t recovered from the shock of Woolworths’ profit warning on Wednesday, even as smaller rival Coles followed it up with a less alarming update.

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Coles shares slipped 0.6 per cent after the company reported a 2.9 per cent rise in sales in the September quarter, driven by a strong supermarket division. Cost-of-living concerns remain a major dampener on the grocer’s business.

Meanwhile, Australia’s biggest grocer Woolworths fell for a second day, losing 2.8 per cent after it told shareholders on Wednesday that it expects an earnings drop at its supermarkets for the December half as customers trade down to cheaper products.

Energy giant AGL slumped 5.5 per cent after investment bank Barrenjoey warned that Australia’s largest power generator was approaching an “earnings hole” with the looming expiry of its cheap coal and gas supply contracts.

The lowdown

It’s been a story of two halves for the Australian sharemarket this month. Having reached a record high of 8384.5 earlier in October, its recent two-week losing streak took the local bourse 1.3 per cent down for the month – its biggest monthly fall since April.

Now all eyes are on November, with next week shaping up to be potentially the biggest one for markets this year. Market-moving events next week include the US election, interest rate decisions from the Australian, US and UK central banks and more details on China’s fiscal stimulus package.

The outcome of these big geopolitical and monetary developments will probably “shape the path for markets into year-end,” says IG market analyst Tony Sycamore.

Household spending figures released by the Australian Bureau of Statistics on Thursday rounded out mixed data for the Reserve Bank ahead of its monetary policy meeting on Melbourne Cup day, AMP economist My Bui said.

Retail sales edged up 0.1 per cent in September, a weaker result after the sizeable 0.7 per cent lift in August. The slightly weaker-than-expected retail trade figures followed strong jobs data and a continued fall in inflation.

“Taken together, they mean that the RBA will have to keep the cash rate at a restrictive level of 4.35 per cent in the next meeting, but they will likely acknowledge the continued progress in inflation and the lack of a major spike in spending following tax cuts,” Bui said.

Overnight on Wall Street, the S&P 500 slipped 0.3 per cent after drifting between gains and losses, though it’s still near its all-time high set this month. The Dow Jones edged down 0.2 per cent, while the Nasdaq slipped 0.6 per cent from its own record set the day before.

Microsoft’s cloud-computing and Office software businesses fuelled stronger-than-projected quarterly revenue growth for the tech giant, a sign that the company’s hefty investments in artificial intelligence are starting to pay off. Still, its shares slumped by 3.5 per cent in after-hours trading.

Meta projected stronger-than-expected holiday quarter sales and touted AI improvements to its core advertising business. But it wasn’t enough to satisfy Wall Street either. Its shares slid by 3.2 per cent in after-hours trading.

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Alphabet climbed 2.8 per cent after beating analysts’ forecasts for profit in the latest quarter, thanks largely to the performance of its Google business.

Computer chip companies have been some of the biggest winners of the AI rush, but Advanced Micro Devices helped drag down stocks across the industry after reporting profit for the latest quarter that only matched analysts’ expectations. AMD’s stock sank 10.6 per cent.

Nvidia, a chip giant that’s rocketed to become one of Wall Street’s largest most influential stocks, fell 1.4 per cent and was one of the heaviest weights on the S&P 500.

Quote of the day

“Many consumers suffered financial harm, incurring thousands of dollars of debt and non-financial harm, such as shame, fear and emotional distress about the debts or being pursued by debt collectors.” That’s ACCC chair Gina Cass-Gottlieb after the competition watchdog sued telco giant Optus for allegedly selling vulnerable, disadvantaged and disabled customers services that they often didn’t want or couldn’t afford, and then in some cases pursuing consumers for resulting debts.

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