Asian shares rise as US-China trade talks progress
Stocks are subdued and the dollar steady amid a lack of detail from US-China trade talks that promised high-level agreement but appeared to do little to resolve longstanding tensions between the world's biggest economies.
Bond investors were also hunkered down for a reading on US inflation due at 8.30am US Eastern time on Wednesday that could show the early impact of tariffs on prices, and a Treasury auction that will test demand for the country's debt.
In London, negotiators from Washington and Beijing said they had "agreed a framework on trade" that would be taken back to their leaders.
US Commerce Secretary Howard Lutnick said the implementation plan should result in restrictions on rare earths and magnets being resolved, but offered no specifics.
"Even though details are scant, as long as the two sides are talking, I think markets will be happy," said Carol Kong, a currency strategist at Australia's Commonwealth Bank.
"It will still be very hard and it will take a long time for both sides to reach a comprehensive trade agreement," she said.
The law was another hurdle as a federal appeals court allowed President Donald Trump's most sweeping tariffs to remain in effect on Tuesday while it reviews a lower court decision blocking them.
Billionaire Elon Musk also said he regretted some of the posts he made last week about Trump, opening the way to a healing of an abrupt rift that has roiled Washington and hurt shares in Musk's Tesla.
Investors in US stocks, who have been badly burned by trade turmoil before, remained cautious, with S&P 500 futures and Nasdaq futures both down 0.2 per cent.
Asian shares were slightly more positive, with MSCI's broadest index of Asia-Pacific shares outside Japan up 0.6 per cent, while the STOXX benchmark for major European shares edged down 0.1 per cent.
The reaction in currency markets was equally muted, with the dollar strengthening slightly against the Japanese yen to trade at 145.15. The euro edged down 0.1 per cent to $US1.1433, nudging the dollar index up to 99.041.
Bond investors also waited for an auction of $US39 billion in 10-year notes later in the day, anxious to see if foreign buyers turn up. Ten-year Treasury yields were little changed at 4.4977 per cent.
Concerns about huge US budget deficits and debt have combined with unease over the White House's shifting policies to make investors demand a higher term premium for holding Treasuries.
Data on US consumer prices for May might also show some initial upward pressure from tariffs, though analysts assume it will take a few months to fully show in the series.
Median forecasts are for the headline consumer price index to rise 0.2 per cent and the core 0.3 per cent, which would nudge the annual rates up to 2.5 per cent and 2.9 per cent, respectively.
Anything higher would be a setback to hopes for more rate cuts from the Federal Reserve and could see bonds sell off. Markets imply little chance the Fed will ease at its meeting next week or in July, but have priced around a 60 per cent chance of a move in September.
In commodity markets, gold gained 0.24 per cent to $US3,329 an ounce.
Oil prices rose to a seven-week high as markets assessed the outcome of the US-China trade talks.
Brent crude futures rose 82 cents to $US67.69 a barrel, while US crude was up 96 cents to $US65.94.
Stocks are subdued and the dollar steady amid a lack of detail from US-China trade talks that promised high-level agreement but appeared to do little to resolve longstanding tensions between the world's biggest economies.
Bond investors were also hunkered down for a reading on US inflation due at 8.30am US Eastern time on Wednesday that could show the early impact of tariffs on prices, and a Treasury auction that will test demand for the country's debt.
In London, negotiators from Washington and Beijing said they had "agreed a framework on trade" that would be taken back to their leaders.
US Commerce Secretary Howard Lutnick said the implementation plan should result in restrictions on rare earths and magnets being resolved, but offered no specifics.
"Even though details are scant, as long as the two sides are talking, I think markets will be happy," said Carol Kong, a currency strategist at Australia's Commonwealth Bank.
"It will still be very hard and it will take a long time for both sides to reach a comprehensive trade agreement," she said.
The law was another hurdle as a federal appeals court allowed President Donald Trump's most sweeping tariffs to remain in effect on Tuesday while it reviews a lower court decision blocking them.
Billionaire Elon Musk also said he regretted some of the posts he made last week about Trump, opening the way to a healing of an abrupt rift that has roiled Washington and hurt shares in Musk's Tesla.
Investors in US stocks, who have been badly burned by trade turmoil before, remained cautious, with S&P 500 futures and Nasdaq futures both down 0.2 per cent.
Asian shares were slightly more positive, with MSCI's broadest index of Asia-Pacific shares outside Japan up 0.6 per cent, while the STOXX benchmark for major European shares edged down 0.1 per cent.
The reaction in currency markets was equally muted, with the dollar strengthening slightly against the Japanese yen to trade at 145.15. The euro edged down 0.1 per cent to $US1.1433, nudging the dollar index up to 99.041.
Bond investors also waited for an auction of $US39 billion in 10-year notes later in the day, anxious to see if foreign buyers turn up. Ten-year Treasury yields were little changed at 4.4977 per cent.
Concerns about huge US budget deficits and debt have combined with unease over the White House's shifting policies to make investors demand a higher term premium for holding Treasuries.
Data on US consumer prices for May might also show some initial upward pressure from tariffs, though analysts assume it will take a few months to fully show in the series.
Median forecasts are for the headline consumer price index to rise 0.2 per cent and the core 0.3 per cent, which would nudge the annual rates up to 2.5 per cent and 2.9 per cent, respectively.
Anything higher would be a setback to hopes for more rate cuts from the Federal Reserve and could see bonds sell off. Markets imply little chance the Fed will ease at its meeting next week or in July, but have priced around a 60 per cent chance of a move in September.
In commodity markets, gold gained 0.24 per cent to $US3,329 an ounce.
Oil prices rose to a seven-week high as markets assessed the outcome of the US-China trade talks.
Brent crude futures rose 82 cents to $US67.69 a barrel, while US crude was up 96 cents to $US65.94.
Stocks are subdued and the dollar steady amid a lack of detail from US-China trade talks that promised high-level agreement but appeared to do little to resolve longstanding tensions between the world's biggest economies.
Bond investors were also hunkered down for a reading on US inflation due at 8.30am US Eastern time on Wednesday that could show the early impact of tariffs on prices, and a Treasury auction that will test demand for the country's debt.
In London, negotiators from Washington and Beijing said they had "agreed a framework on trade" that would be taken back to their leaders.
US Commerce Secretary Howard Lutnick said the implementation plan should result in restrictions on rare earths and magnets being resolved, but offered no specifics.
"Even though details are scant, as long as the two sides are talking, I think markets will be happy," said Carol Kong, a currency strategist at Australia's Commonwealth Bank.
"It will still be very hard and it will take a long time for both sides to reach a comprehensive trade agreement," she said.
The law was another hurdle as a federal appeals court allowed President Donald Trump's most sweeping tariffs to remain in effect on Tuesday while it reviews a lower court decision blocking them.
Billionaire Elon Musk also said he regretted some of the posts he made last week about Trump, opening the way to a healing of an abrupt rift that has roiled Washington and hurt shares in Musk's Tesla.
Investors in US stocks, who have been badly burned by trade turmoil before, remained cautious, with S&P 500 futures and Nasdaq futures both down 0.2 per cent.
Asian shares were slightly more positive, with MSCI's broadest index of Asia-Pacific shares outside Japan up 0.6 per cent, while the STOXX benchmark for major European shares edged down 0.1 per cent.
The reaction in currency markets was equally muted, with the dollar strengthening slightly against the Japanese yen to trade at 145.15. The euro edged down 0.1 per cent to $US1.1433, nudging the dollar index up to 99.041.
Bond investors also waited for an auction of $US39 billion in 10-year notes later in the day, anxious to see if foreign buyers turn up. Ten-year Treasury yields were little changed at 4.4977 per cent.
Concerns about huge US budget deficits and debt have combined with unease over the White House's shifting policies to make investors demand a higher term premium for holding Treasuries.
Data on US consumer prices for May might also show some initial upward pressure from tariffs, though analysts assume it will take a few months to fully show in the series.
Median forecasts are for the headline consumer price index to rise 0.2 per cent and the core 0.3 per cent, which would nudge the annual rates up to 2.5 per cent and 2.9 per cent, respectively.
Anything higher would be a setback to hopes for more rate cuts from the Federal Reserve and could see bonds sell off. Markets imply little chance the Fed will ease at its meeting next week or in July, but have priced around a 60 per cent chance of a move in September.
In commodity markets, gold gained 0.24 per cent to $US3,329 an ounce.
Oil prices rose to a seven-week high as markets assessed the outcome of the US-China trade talks.
Brent crude futures rose 82 cents to $US67.69 a barrel, while US crude was up 96 cents to $US65.94.
Stocks are subdued and the dollar steady amid a lack of detail from US-China trade talks that promised high-level agreement but appeared to do little to resolve longstanding tensions between the world's biggest economies.
Bond investors were also hunkered down for a reading on US inflation due at 8.30am US Eastern time on Wednesday that could show the early impact of tariffs on prices, and a Treasury auction that will test demand for the country's debt.
In London, negotiators from Washington and Beijing said they had "agreed a framework on trade" that would be taken back to their leaders.
US Commerce Secretary Howard Lutnick said the implementation plan should result in restrictions on rare earths and magnets being resolved, but offered no specifics.
"Even though details are scant, as long as the two sides are talking, I think markets will be happy," said Carol Kong, a currency strategist at Australia's Commonwealth Bank.
"It will still be very hard and it will take a long time for both sides to reach a comprehensive trade agreement," she said.
The law was another hurdle as a federal appeals court allowed President Donald Trump's most sweeping tariffs to remain in effect on Tuesday while it reviews a lower court decision blocking them.
Billionaire Elon Musk also said he regretted some of the posts he made last week about Trump, opening the way to a healing of an abrupt rift that has roiled Washington and hurt shares in Musk's Tesla.
Investors in US stocks, who have been badly burned by trade turmoil before, remained cautious, with S&P 500 futures and Nasdaq futures both down 0.2 per cent.
Asian shares were slightly more positive, with MSCI's broadest index of Asia-Pacific shares outside Japan up 0.6 per cent, while the STOXX benchmark for major European shares edged down 0.1 per cent.
The reaction in currency markets was equally muted, with the dollar strengthening slightly against the Japanese yen to trade at 145.15. The euro edged down 0.1 per cent to $US1.1433, nudging the dollar index up to 99.041.
Bond investors also waited for an auction of $US39 billion in 10-year notes later in the day, anxious to see if foreign buyers turn up. Ten-year Treasury yields were little changed at 4.4977 per cent.
Concerns about huge US budget deficits and debt have combined with unease over the White House's shifting policies to make investors demand a higher term premium for holding Treasuries.
Data on US consumer prices for May might also show some initial upward pressure from tariffs, though analysts assume it will take a few months to fully show in the series.
Median forecasts are for the headline consumer price index to rise 0.2 per cent and the core 0.3 per cent, which would nudge the annual rates up to 2.5 per cent and 2.9 per cent, respectively.
Anything higher would be a setback to hopes for more rate cuts from the Federal Reserve and could see bonds sell off. Markets imply little chance the Fed will ease at its meeting next week or in July, but have priced around a 60 per cent chance of a move in September.
In commodity markets, gold gained 0.24 per cent to $US3,329 an ounce.
Oil prices rose to a seven-week high as markets assessed the outcome of the US-China trade talks.
Brent crude futures rose 82 cents to $US67.69 a barrel, while US crude was up 96 cents to $US65.94.
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The Advertiser
11 hours ago
- The Advertiser
Wall Street falls amid Israel-Iran conflict
Wall Street's main indexes have fallen after Israel's deadly strike on Iranian nuclear facilities inflamed tensions in the oil-rich Middle East and battered risk sentiment across global markets. Israel has warned that the widescale strikes were the start of a prolonged operation to prevent Iran from building an atomic weapon. Iran has promised a harsh response. Oil prices surged nearly 7.0 per cent on fears the conflict could disrupt crude supply from the Middle East. US energy stocks rose in tandem, with Exxon up 1.7 per cent. Airline stocks dropped as fuel costs could surge if supply bottlenecks materialise. Delta Air Lines was down 3.7 per cent, United Airlines dropped 4.4 per cent and American Airlines declined 4.7 per cent. Defence stocks climbed, with Lockheed Martin, RTX Corporation, Northrop Grumman gaining between 2.2 per cent and 3.2 per cent. "We have major domestic policy uncertainty and now on top of that, you have geopolitical unrest, which not only is impacting oil markets but the broader risk premium," said Eric Teal, chief investment officer at Comerica Wealth Management. US President Donald Trump urged Iran to make a deal, saying "the next already planned attacks" will be "even more brutal". Israeli Prime Minister Benjamin Netanyahu's office said he would speak to Trump later in the day. In early trading on Friday, the Dow Jones Industrial Average fell 659.45 points, or 1.52 per cent, to 42,313.10, the S&P 500 lost 60.38 points, or 1.00 per cent, to 5,984.88 and the Nasdaq Composite lost 227.71 points, or 1.16 per cent, to 19,435.01. Ten of the 11 major S&P 500 sub-sectors fell, with only energy stocks gaining 1.2 per cent. Financials declined the most, with a 2.1 per cent fall. Information technology lost 1.3 per cent. Adobe fell 6.6 per cent despite the Photoshop maker raising its full-year results forecast. Most megacap and growth stocks declined. Nvidia was down 2.1 per cent, Apple fell 1.5 per cent and Amazon lost 1.3 per cent. Visa shares hit an over four-week low and were last down 5.9 per cent. US-listed shares of gold miners rose tracking a rise in bullion prices. Newmont gained 2.2 per cent while AngloGold Ashanti rose 2.1 per cent. The S&P 500 remains 2.6 per cent below its record high reached earlier this year, following stellar monthly gains in May driven by upbeat corporate earnings and a softening in Trump's trade stance. The tech-heavy Nasdaq is about 3.8 per cent off its record closing high reached in December last year. A tame consumer price report, softer-than-expected producer price data and largely unchanged initial jobless claims earlier this week helped calm investor jitters around tariff-driven price pressures. However, Federal Reserve policymakers are widely expected to keep rates unchanged at their meeting next week. A University of Michigan survey showed consumer sentiment increased to 60.5 for June from the previous month, according to a preliminary estimate. Declining issues outnumbered advancers by a 3.88-to-1 ratio on the NYSE and by a 4.4-to-1 ratio on the Nasdaq. The S&P 500 posted 8 new 52-week highs and 2 new lows while the Nasdaq Composite recorded 18 new highs and 70 new lows. Wall Street's main indexes have fallen after Israel's deadly strike on Iranian nuclear facilities inflamed tensions in the oil-rich Middle East and battered risk sentiment across global markets. Israel has warned that the widescale strikes were the start of a prolonged operation to prevent Iran from building an atomic weapon. Iran has promised a harsh response. Oil prices surged nearly 7.0 per cent on fears the conflict could disrupt crude supply from the Middle East. US energy stocks rose in tandem, with Exxon up 1.7 per cent. Airline stocks dropped as fuel costs could surge if supply bottlenecks materialise. Delta Air Lines was down 3.7 per cent, United Airlines dropped 4.4 per cent and American Airlines declined 4.7 per cent. Defence stocks climbed, with Lockheed Martin, RTX Corporation, Northrop Grumman gaining between 2.2 per cent and 3.2 per cent. "We have major domestic policy uncertainty and now on top of that, you have geopolitical unrest, which not only is impacting oil markets but the broader risk premium," said Eric Teal, chief investment officer at Comerica Wealth Management. US President Donald Trump urged Iran to make a deal, saying "the next already planned attacks" will be "even more brutal". Israeli Prime Minister Benjamin Netanyahu's office said he would speak to Trump later in the day. In early trading on Friday, the Dow Jones Industrial Average fell 659.45 points, or 1.52 per cent, to 42,313.10, the S&P 500 lost 60.38 points, or 1.00 per cent, to 5,984.88 and the Nasdaq Composite lost 227.71 points, or 1.16 per cent, to 19,435.01. Ten of the 11 major S&P 500 sub-sectors fell, with only energy stocks gaining 1.2 per cent. Financials declined the most, with a 2.1 per cent fall. Information technology lost 1.3 per cent. Adobe fell 6.6 per cent despite the Photoshop maker raising its full-year results forecast. Most megacap and growth stocks declined. Nvidia was down 2.1 per cent, Apple fell 1.5 per cent and Amazon lost 1.3 per cent. Visa shares hit an over four-week low and were last down 5.9 per cent. US-listed shares of gold miners rose tracking a rise in bullion prices. Newmont gained 2.2 per cent while AngloGold Ashanti rose 2.1 per cent. The S&P 500 remains 2.6 per cent below its record high reached earlier this year, following stellar monthly gains in May driven by upbeat corporate earnings and a softening in Trump's trade stance. The tech-heavy Nasdaq is about 3.8 per cent off its record closing high reached in December last year. A tame consumer price report, softer-than-expected producer price data and largely unchanged initial jobless claims earlier this week helped calm investor jitters around tariff-driven price pressures. However, Federal Reserve policymakers are widely expected to keep rates unchanged at their meeting next week. A University of Michigan survey showed consumer sentiment increased to 60.5 for June from the previous month, according to a preliminary estimate. Declining issues outnumbered advancers by a 3.88-to-1 ratio on the NYSE and by a 4.4-to-1 ratio on the Nasdaq. The S&P 500 posted 8 new 52-week highs and 2 new lows while the Nasdaq Composite recorded 18 new highs and 70 new lows. Wall Street's main indexes have fallen after Israel's deadly strike on Iranian nuclear facilities inflamed tensions in the oil-rich Middle East and battered risk sentiment across global markets. Israel has warned that the widescale strikes were the start of a prolonged operation to prevent Iran from building an atomic weapon. Iran has promised a harsh response. Oil prices surged nearly 7.0 per cent on fears the conflict could disrupt crude supply from the Middle East. US energy stocks rose in tandem, with Exxon up 1.7 per cent. Airline stocks dropped as fuel costs could surge if supply bottlenecks materialise. Delta Air Lines was down 3.7 per cent, United Airlines dropped 4.4 per cent and American Airlines declined 4.7 per cent. Defence stocks climbed, with Lockheed Martin, RTX Corporation, Northrop Grumman gaining between 2.2 per cent and 3.2 per cent. "We have major domestic policy uncertainty and now on top of that, you have geopolitical unrest, which not only is impacting oil markets but the broader risk premium," said Eric Teal, chief investment officer at Comerica Wealth Management. US President Donald Trump urged Iran to make a deal, saying "the next already planned attacks" will be "even more brutal". Israeli Prime Minister Benjamin Netanyahu's office said he would speak to Trump later in the day. In early trading on Friday, the Dow Jones Industrial Average fell 659.45 points, or 1.52 per cent, to 42,313.10, the S&P 500 lost 60.38 points, or 1.00 per cent, to 5,984.88 and the Nasdaq Composite lost 227.71 points, or 1.16 per cent, to 19,435.01. Ten of the 11 major S&P 500 sub-sectors fell, with only energy stocks gaining 1.2 per cent. Financials declined the most, with a 2.1 per cent fall. Information technology lost 1.3 per cent. Adobe fell 6.6 per cent despite the Photoshop maker raising its full-year results forecast. Most megacap and growth stocks declined. Nvidia was down 2.1 per cent, Apple fell 1.5 per cent and Amazon lost 1.3 per cent. Visa shares hit an over four-week low and were last down 5.9 per cent. US-listed shares of gold miners rose tracking a rise in bullion prices. Newmont gained 2.2 per cent while AngloGold Ashanti rose 2.1 per cent. The S&P 500 remains 2.6 per cent below its record high reached earlier this year, following stellar monthly gains in May driven by upbeat corporate earnings and a softening in Trump's trade stance. The tech-heavy Nasdaq is about 3.8 per cent off its record closing high reached in December last year. A tame consumer price report, softer-than-expected producer price data and largely unchanged initial jobless claims earlier this week helped calm investor jitters around tariff-driven price pressures. However, Federal Reserve policymakers are widely expected to keep rates unchanged at their meeting next week. A University of Michigan survey showed consumer sentiment increased to 60.5 for June from the previous month, according to a preliminary estimate. Declining issues outnumbered advancers by a 3.88-to-1 ratio on the NYSE and by a 4.4-to-1 ratio on the Nasdaq. The S&P 500 posted 8 new 52-week highs and 2 new lows while the Nasdaq Composite recorded 18 new highs and 70 new lows. Wall Street's main indexes have fallen after Israel's deadly strike on Iranian nuclear facilities inflamed tensions in the oil-rich Middle East and battered risk sentiment across global markets. Israel has warned that the widescale strikes were the start of a prolonged operation to prevent Iran from building an atomic weapon. Iran has promised a harsh response. Oil prices surged nearly 7.0 per cent on fears the conflict could disrupt crude supply from the Middle East. US energy stocks rose in tandem, with Exxon up 1.7 per cent. Airline stocks dropped as fuel costs could surge if supply bottlenecks materialise. Delta Air Lines was down 3.7 per cent, United Airlines dropped 4.4 per cent and American Airlines declined 4.7 per cent. Defence stocks climbed, with Lockheed Martin, RTX Corporation, Northrop Grumman gaining between 2.2 per cent and 3.2 per cent. "We have major domestic policy uncertainty and now on top of that, you have geopolitical unrest, which not only is impacting oil markets but the broader risk premium," said Eric Teal, chief investment officer at Comerica Wealth Management. US President Donald Trump urged Iran to make a deal, saying "the next already planned attacks" will be "even more brutal". Israeli Prime Minister Benjamin Netanyahu's office said he would speak to Trump later in the day. In early trading on Friday, the Dow Jones Industrial Average fell 659.45 points, or 1.52 per cent, to 42,313.10, the S&P 500 lost 60.38 points, or 1.00 per cent, to 5,984.88 and the Nasdaq Composite lost 227.71 points, or 1.16 per cent, to 19,435.01. Ten of the 11 major S&P 500 sub-sectors fell, with only energy stocks gaining 1.2 per cent. Financials declined the most, with a 2.1 per cent fall. Information technology lost 1.3 per cent. Adobe fell 6.6 per cent despite the Photoshop maker raising its full-year results forecast. Most megacap and growth stocks declined. Nvidia was down 2.1 per cent, Apple fell 1.5 per cent and Amazon lost 1.3 per cent. Visa shares hit an over four-week low and were last down 5.9 per cent. US-listed shares of gold miners rose tracking a rise in bullion prices. Newmont gained 2.2 per cent while AngloGold Ashanti rose 2.1 per cent. The S&P 500 remains 2.6 per cent below its record high reached earlier this year, following stellar monthly gains in May driven by upbeat corporate earnings and a softening in Trump's trade stance. The tech-heavy Nasdaq is about 3.8 per cent off its record closing high reached in December last year. A tame consumer price report, softer-than-expected producer price data and largely unchanged initial jobless claims earlier this week helped calm investor jitters around tariff-driven price pressures. However, Federal Reserve policymakers are widely expected to keep rates unchanged at their meeting next week. A University of Michigan survey showed consumer sentiment increased to 60.5 for June from the previous month, according to a preliminary estimate. Declining issues outnumbered advancers by a 3.88-to-1 ratio on the NYSE and by a 4.4-to-1 ratio on the Nasdaq. The S&P 500 posted 8 new 52-week highs and 2 new lows while the Nasdaq Composite recorded 18 new highs and 70 new lows.
Perth Now
12 hours ago
- Perth Now
Wall Street falls amid Israel-Iran conflict
Wall Street's main indexes have fallen after Israel's deadly strike on Iranian nuclear facilities inflamed tensions in the oil-rich Middle East and battered risk sentiment across global markets. Israel has warned that the widescale strikes were the start of a prolonged operation to prevent Iran from building an atomic weapon. Iran has promised a harsh response. Oil prices surged nearly 7.0 per cent on fears the conflict could disrupt crude supply from the Middle East. US energy stocks rose in tandem, with Exxon up 1.7 per cent. Airline stocks dropped as fuel costs could surge if supply bottlenecks materialise. Delta Air Lines was down 3.7 per cent, United Airlines dropped 4.4 per cent and American Airlines declined 4.7 per cent. Defence stocks climbed, with Lockheed Martin, RTX Corporation, Northrop Grumman gaining between 2.2 per cent and 3.2 per cent. "We have major domestic policy uncertainty and now on top of that, you have geopolitical unrest, which not only is impacting oil markets but the broader risk premium," said Eric Teal, chief investment officer at Comerica Wealth Management. US President Donald Trump urged Iran to make a deal, saying "the next already planned attacks" will be "even more brutal". Israeli Prime Minister Benjamin Netanyahu's office said he would speak to Trump later in the day. In early trading on Friday, the Dow Jones Industrial Average fell 659.45 points, or 1.52 per cent, to 42,313.10, the S&P 500 lost 60.38 points, or 1.00 per cent, to 5,984.88 and the Nasdaq Composite lost 227.71 points, or 1.16 per cent, to 19,435.01. Ten of the 11 major S&P 500 sub-sectors fell, with only energy stocks gaining 1.2 per cent. Financials declined the most, with a 2.1 per cent fall. Information technology lost 1.3 per cent. Adobe fell 6.6 per cent despite the Photoshop maker raising its full-year results forecast. Most megacap and growth stocks declined. Nvidia was down 2.1 per cent, Apple fell 1.5 per cent and Amazon lost 1.3 per cent. Visa shares hit an over four-week low and were last down 5.9 per cent. US-listed shares of gold miners rose tracking a rise in bullion prices. Newmont gained 2.2 per cent while AngloGold Ashanti rose 2.1 per cent. The S&P 500 remains 2.6 per cent below its record high reached earlier this year, following stellar monthly gains in May driven by upbeat corporate earnings and a softening in Trump's trade stance. The tech-heavy Nasdaq is about 3.8 per cent off its record closing high reached in December last year. A tame consumer price report, softer-than-expected producer price data and largely unchanged initial jobless claims earlier this week helped calm investor jitters around tariff-driven price pressures. However, Federal Reserve policymakers are widely expected to keep rates unchanged at their meeting next week. A University of Michigan survey showed consumer sentiment increased to 60.5 for June from the previous month, according to a preliminary estimate. Declining issues outnumbered advancers by a 3.88-to-1 ratio on the NYSE and by a 4.4-to-1 ratio on the Nasdaq. The S&P 500 posted 8 new 52-week highs and 2 new lows while the Nasdaq Composite recorded 18 new highs and 70 new lows.
News.com.au
13 hours ago
- News.com.au
Criterion: ‘Rebellious' banks are going for broker in their war against mortgage intermediaries
With home loan margins shrinking, the banks want to originate more loans in house Mortgage brokers account for about 75% of all home loans written The banks hope that better service via the use of technology will win back customers The banks are redoubling their efforts to win back direct home loan customers from the mortgage brokers, having ceded these relationships by closing thousands of branches. "Signs of rebellion are emerging,' says S&P Global Ratings in a new report. While winning the occasional battle, they're still losing the war. According to the listed broker intermediary Australian Financial Group (ASX:AFG), brokers account for 75% of all home loans – up from 59% three years ago. When John Symonds' pioneering Aussie Home Loans opened its doors in 1992, the lenders saw the brokers as a convenient way to glean market share while reducing their physical footprint. Now they are seen as a nuisance, pocketing a nice cut of shrinking mortgage margins. Typically, the banks pay an upfront fee of 0.65% of the loan, with an ongoing 0.15% trial (aka money for nothing). According to KPMG, the Big Four operated on an average net interest margin of 1.81% in the first half. So no wonder they're grumpy about the brokers stealing their lunch. The biggest home lender, the Commonwealth Bank (ASX:CBA) claims broker-originated loans are 20-30% less profitable than own-sourced ones. Tapping a younger audience Clearly borrowers appreciate brokers for their ability to corral the best loans and present a panel of options. Many of them perceive the service as free, but the cost is built into the interest rate. According to S&P credit analyst Simon Geldenhuys, the banks believe that younger borrowers are more willing to engage directly via digital channels. 'While many Australians still favour person-to-person interaction for the biggest purchase of their lives, a new generation of tech-savvy borrowers continues to embrace digital solutions,' says S&P credit analyst Simon Geldenhuys. 'By digitising the mortgage process and offering greater price transparency, banks might dilute the mortgage broker value proposition." The idea is that banishing the brokers means better returns for the banks and 'potentially better pricing for borrowers'. Honing the attack … S&P Global notes all the Big Four are investing in long-term tech infrastructure upgrades to support their own digital products. This includes automating credit assessments and document verification, thus reducing application wait times to hours, or even minutes. No prizes for guessing that AI will play a key role. The CBA's key weapon is its digital direct arm Unloan, which offers a smaller range of simpler – and thus cheaper – loans. At the National Australia Bank's (ASX:NAB) half-year results, CEO Andrew Irvine cited improving proprietary lending as one of the bank's three 'clear priorities'. Over the years the banks have made stuttering attempts to overcome their addiction to brokers. The Bank of Queensland (ASX:BOQ) renounced brokers in 2004, only to return to the market in 2012. Last year, it 'paused' broker applications as of August. The Australia and New Zealand Banking Group (ASX:ANZ) has had a relationship with brokers that's been more off-again on again than Jennifer Lopez and Ben Affleck. The branchless Macquarie Group (ASX:MQG) relies heavily on brokers – and has been winning market share. Heading to a stalemate? The battle could end up as a Ukraine-style stalemate, because the lenders that continue to deal with the enemy are likely to win market share. If the banks prevail, the ones with the greatest upside are those with the greatest broker exposure: the NAB, Westpac (ASX:WBC) and the ANZ Bank. The NAB and Westpac source about half of their loans via brokers, but with the ANZ the figure is more like two-thirds. If the intermediaries win the battle of the brokers, AFG is the go-to stock. A 'mortgage aggregator' AFG provides the back-office engine – such as tech, compliance and automated marketing – to a network of 4100 brokers. AFG's December half numbers showed no sign of distress: settlements through its network hit a record level for a first half – $31.8 billion, up 13 per cent. Also a lender, AFG accounts for one in six broker loans. Mortgage Choice, another ASX-listed early mover, was acquired by REA Group in 2021. With its catchphrase of 'we'll save you', the unlisted Aussie Home Loans thrived with its brazen anti-bank schtick . Ironically, the Aussie was acquired by the CBA, which goes to show the battle lines in this skirmish are not a rigid as one might think.
