ASX set to rise as Wall Street edges higher; Trump Media slumps

The Australian sharemarket was relatively flat at lunchtime on Wednesday, with the materials, utilities and industrial sectors just keeping the local benchmark index in the green.

The S&P/ASX 200 edged up just 3.1 points to 7854.8 at 1pm AEST, with the communication services sector dragging on its performance.

Telstra said job cuts announced this week will save the company $350 million.Credit: Louie Douvis

Shares in telco giant Telstra continued their slide one day after announcing it would cut up to 2800 jobs. The stock was down 3.8 per cent on Wednesday after shedding 2.7 per cent a day earlier.

TechnologyOne shares rallied for a second successive trading session to be among the best performers, with a gain of 8.1 per cent.

The company on Tuesday revealed half-year results that saw double-digit increases in revenue and profit. The shares are up more than 12 per cent in two days.

Webjet shares rose 7.8 per cent after the travel company revealed plans for a demerger, as well as a profit surge. Other top performers include Alumina (up 5 per cent) and Telix Pharmaceuticals (up 4.9 per cent).

Eagers Automotive shares slumped 13.9 per cent after Australia’s largest car dealership group warned that its half-year profits would be 15 per cent lower than last year. Poultry supplier Inghams also 9.7 per cent while Life360 is down 4.2 per cent.

Under-fire Lendlease chairman Michael Ullmer announced he would step down at the property giant’s next shareholder meeting in November. Lendlease shares are down 0.3 per cent in the early afternoon.

Overnight, US stock indices again edged higher in another quiet day of trading.

The S&P 500 Index rose 0.3 per cent to surpass its record set last week. The Nasdaq Composite Index added 0.2 per cent, eclipsing its day-earlier high. The Dow Jones Industrial Average advanced 0.2 per cent to sit just below its high set last week.

It was another quiet day of trading on Wall Street.Credit: Bloomberg

Wall Street’s indices have climbed to records largely on expectations for the US Federal Reserve to cut interest rates later this year, as inflation cools. More reports showing big US companies earning fatter profits than expected have also boosted the equity market.

Macy’s joined the chorus line of companies delivering a stronger profit for the latest quarter than analysts had expected. Its stock jumped 5.1 per cent.

The company, which operates 508 department stores across the United States, also raised the bottom end of its forecasts for upcoming sales and profit, spurring the advance.

Trump Media & Technology Group, the company behind Donald Trump’s truth social network, sank 8.7 per cent after disclosing a net loss of $US327.6 million in its first quarterly report as a publicly traded company.

Rates for mortgages, credit cards and other payments have become more expensive because the Fed has been keeping its main interest rate at the highest level in more than two decades.

However, an encouraging report released last week showing inflation may finally be heading back in the right direction has raised hopes that the Fed will cut its main interest rate once or twice this year.

Top Fed official Christopher Waller said in a speech that he is expecting to see moderation in economic data after reports recently came in weaker than expected on sales at US retailer and on the strength of American services businesses. That should help put downward pressure on inflation.

However, Waller said that he would “need to see several more months of good inflation data before I would be comfortable supporting an easing in the stance of monetary policy”, unless the US job market weakened significantly before then.

Hopes for coming rate cuts to rates have sent Treasury bond yields lower, easing pressure on the stock market. The yield on the 10-year Treasury slipped to 4.41 per cent, from 4.48 per cent late Monday. The two-year yield, which more closely tracks expectations for Fed actions, slipped to 4.83 per cent, from 4.85 per cent.

With AP

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