ASX News LIVE | ASX for Weak Opening as High USD Slows Commodity Rallies

The ASX 200 closed down -0.15% at 7,770.6 as a high USD weighed on commodity rallies and dragged down the ASX today.

The ASX 200 then closes the week up +0.74% and up +2.37% for the year-to-date.

Heavy losses in the Big Four banks, Energy, and gold miners defined the day, with 5 of the 11 sectors finishing in the green.

Real Estate (+1.43%) and Health Care (+1.34%) finished well above the other sectors as mega-cap’s Goodman Group gained +3.39% and CSL gained +1.30%.

The Energy sector (-1.30%) was the largest underperformer as Woodside Energy fell -1.75% and Yancoal dropped -2.05%.

The heaviest losses were seen in gold miners toady, with Genesis Minerals the biggest faller, down -6.25% and Bellevue Gold down -5.28%.

Apple’s [NASDAQ:APPL] stock price took another big hit, plunging 4.1% to $171.37 per share, following the announcement of a major antitrust lawsuit filed against the tech giant in the United States. This legal action threatens to dismantle Apple’s tight control over the ecosystem surrounding iPhone users.

Despite a broader rally in the tech sector, Apple’s shares have already suffered an 11% decline since the start of the year.

The U.S. Department of Justice has unveiled a sweeping antitrust lawsuit against Apple, accusing the tech behemoth of engineering an illegal monopoly in the smartphone market that shuts out competitors and stifles innovation.

The lawsuit alleges that Apple wields monopoly power in the smartphone market and has engaged in “a broad, sustained, and illegal course of conduct” by leveraging its control over the iPhone.

The lawsuit specifically seeks to prevent Apple from undermining technologies that compete with its own apps in areas such as streaming, messaging, and digital payments. It also aims to stop Apple from including language in its contracts with developers, accessory makers, and consumers that allows it to “obtain, maintain, extend or entrench a monopoly.”

Adding to Apple’s woes, reports suggest that Apple and Google will be among the first companies to face investigations under the European Union’s new Digital Law.

In a slightly off-topic but interesting development, the first glimpse of the very first Neuralink patient has come out.

The patient who is paralysed is shown using the Elon Musk-backed Neuralink to control his computer mouse to play chess.

The patient, Noland Arbaugh, said during the stream, which was broadcast on Musk’s social media company X, that the chip was “not perfect” but had already improved his life considerably.

“It’s not perfect. I would say we have run into some issues. I don’t want people to think that this is the end of the journey. There’s a lot of work to be done, but it has already changed my life,” Arbaugh said

Would you consider getting a brain implant with something like this?

The first human Neuralink patient, who is paralysed, controlling a computer and playing chess just by thinking. pic.twitter.com/eMt159JoIg

— Historic Vids (@historyinmemes) March 21, 2024

The Reserve Bank of Australia released its March Financial Stability Assessment.

This is where the RBA gives its outlook for the global economy, and things were generally positive.

Some of the key takeaways were:

• The outlook for the global economy has improved, but global financial stability risks remain elevated.
• Potential risks include weakness in the Chinese property sector, deterioration in global commercial real estate markets, and disorderly adjustments in financial asset prices due to worse-than-expected macroeconomic outcomes or market fragilities.
• Most Australian households and businesses remain able to service their debt and meet expenses, supported by strong labour markets, accumulated savings, and rising housing prices.
• Challenges persist in domestic commercial real estate markets, particularly for office spaces, but systemic risks to the banking system are lower than in previous downturns.

Key quotes included:

“Financial market participants have been increasingly optimistic about the prospects for a soft landing in the global economy.”

“A substantial easing cycle in monetary policy is expected over the next two years or so, with inflation returning to central banks’ targets and unemployment rising only modestly.”

“Although pressures from high inflation and tight monetary policy continue to weigh on many households and businesses, a number of developments – including the resolution of supply chain disruptions, declines in energy prices, continued strength in labour markets, strong household balance sheets and solid corporate earnings – have contributed to the global economy’s resilience to date.”

The RBA also saw strength in foreign banks, which is notable considering some shakiness in regional US banks.

“The capital position of large international banks leaves them well placed to weather a decline in asset quality and/or worsening macroeconomic conditions. However, several economies, including the United States, have a sizeable tail of smaller banks, some of which are more vulnerable due to asset quality and profitability concerns.”

The ASX 200 is down by -0.46% around midday, trading at 7,746.1 after heavy losses in Energy (-1.43%) and Mining (-0.96%) as the high USD weighs on ASX commodity markets.

Only Real Estate (+1.26%) and Health Care (+0.60%) were in the green around noon. Energy stocks experienced a sharp decline, with Woodside Energy falling -1.88% and Santos dropping -1%, as crude oil prices decreased by -1.3%.

Brent crude oil closed below $US86 per barrel, despite optimism that the Federal Reserve will continue its path of interest-rate cuts this year, a stronger US dollar overpowered the market.

Gold prices eased to $US2176 per ounce after setting a new record high, though the precious metal is still up nearly 10% since mid-February.

Gold stocks were among the worst performers, tracking the decline in the precious metal price, with Bellevue Gold dropping -4.5% and Genesis Minerals losing -4.69%.

Medical device giant Fisher & Paykel Healthcare [ASX:FPH] has revised its earnings guidance upwards for FY24 today, citing strong demand.

The company now expects its net profit after tax to range between US$260-265 million, up from US$250-60m.

FPH also expects full-year operating revenue to reach US$1.73 billion.

The company will also be undertaking a revaluation of its land, which it expects could impact its FY24 net profits.

Lewis Gradon, Managing Director and CEO, said today:

‘In the Hospital product group, there has been a continuation of solid demand for our hospital consumables across the product portfolio throughout the second half, which is towards the upper end of our expectations from November.’

The company’s shares are up 6.45% this morning, trading at $23.90 per share.

Good morning. Charlie here,

The ASX 200 opened flat on an uncertain day as a higher US dollar weighs on commodities. On Wall Street, all three major indices hit fresh all-time highs overnight. Société Générale lifted its targets for the S&P 500 and extended its bullish bias for US stocks, reiterating that ‘all roads lead to the US.’

The US dollar index has been up 0.74% since the ASX close yesterday, as the rising US dollar slowed the recent rally of oil, gold, and silver.

Meanwhile, the Swiss Central Bank unexpectedly cut interest rates by 25bps. This is the first Central Bank to begin cutting this cycle and watching responses from other European Central Banks will be interesting.

Wall Street: S&P 500 +0.32%, Dow +0.68%, Nasdaq +0.20%.

Overseas: FTSE +1.88%, STOXX +1.04%, Nikkei +2.03%, SSE flat.

The Aussie dollar fell -0.37% to US 65.57 cents.

US 10-year bond yields -1bps to 4.27%.

Australian 10-year bond yields +2bps to 4.07%.

Gold fell -1.02% to US$2,181.31, while Silver plummeted -3.70% to US$24.75.

Bitcoin fell -3.10% to US$65,424, while Ethereum fell -0.72% to US$3,486.

Oil Brent fell -0.43% to US$85.58, while WTI Crude fell -0.23% to US$80.88.

Iron ore rose +3.2% to US$109.15 a tonne.