Welcome to your five-minute recap of the trading day.
The numbers
The Australian sharemarket closed out the second last day of 2024 in the red, as risk-averse investors cleared their decks and a sell-off in the world’s largest technology companies hurt US stocks in the final stretch of a stellar year.
Nasdaq, one of the “magnificent seven” companies, bore the brunt of last week’s selling.Credit: Bloomberg
The S&P/ASX200 lost 26.8 points or 0.3 per cent, to 8235, with only one of the 11 industry sectors trading in the green. The losses come after the market rose 0.5 per cent last week after the Christmas break. Despite the wobble, the benchmark index is up 8 per cent for the year. The Australian dollar rose and traded at 62.43 cents at 4.13pm AEDT.
The lifters
Energy was the only sector in green on Monday, with Woodside Energy, Santos and Yancoal up 1 per cent, 1.7 per cent and 0.6 per cent respectively. Ampol also had a strong day, gaining 1.3 per cent while Whitehaven coal soared 2.5 per cent.
Healthcare giants were mixed, with biotech juggernaut CSL up 0.3 per cent and software medical imaging company Pro Medicus up 0.01 per cent. However, Sonic Health Care was down 0.8 per cent.
The laggards
The technology sector had a lacklustre session, with software maker Technology One down 0.2 per cent and Xero down 0.9 per cent. WiseTech Global – the nation’s biggest tech company – was up 0.8 per cent, recovering from a drop earlier in the day. WiseTech Global founder and former chief executive Richard White sold a large amount of his shares in on-market transactions between October 2 and December 20.
The big four banks were also hit, with CBA – the biggest stock on the ASX – slipping 0.7 per cent, while Westpac, ANZ and NAB were down 0.3 per cent, 0.2 per cent and 0.5 respectively. Meanwhile, mining heavyweights were mixed with BHP (up 0.2 per cent), Rio Tinto (up 0.9 per cent) and Fortescue (down 0.1 per cent).
Major shopping centres had a tough day despite Australians consumers forking out $1.3 billion at shopping centres and stores on Boxing Day. Shopping centre owner Scentre was down 1.1 per cent, Stockland was down 2.6 per cent and Vicinity Groups lost 0.5. Meanwhile, logistics trust The Goodman Group slipped 1.4 per cent and property developer Lendlease lost 0.3 per cent.
The lowdown
Shaw and Partners senior investment advisor Adam Dawes said Monday’s losses were typical for this time of the year.
“Traditionally, this time of year, we see a lot of dividends being paid, hence the readjustment period,” he explained. “The property sector all paid their dividends today … so that would have contributed to more of a loss.”
In the US on Friday, the S&P 500 lost 1.1 per cent and the Nasdaq 100 slipped 1.4 per cent. While every major industry succumbed to Friday’s slide, tech megacaps bore the brunt of the selling. That’s after a torrid surge, in which the group of companies dubbed the “magnificent seven” accounted for more than half of the US equity benchmark’s gains in 2024.
Funds tied to several of the major themes that have driven markets and fund flows over the past three years stumbled during the week ending Christmas Day, according to data compiled by EPFR. Redemptions from cryptocurrency funds hit a record high while technology sector funds extended their longest outflow streak since the first week of 2023, the firm said.
This year’s rally in US equities has driven the expectations for stocks so high that it may turn out to be the biggest hurdle for further gains in the new year. And the bar is even higher for tech stocks, given their massive surge in 2024.
A Bloomberg Intelligence analysis recently found that analysts estimate a nearly 30 per cent earnings growth for the sector next year, but tech’s market-cap share of the S&P 500 index implies closer to 40 per cent growth expectations may be embedded in the stocks.
Tweet of the day
Quote of the day
“Elon Musk dominated world headlines in 2024 and is by far the technology sector’s most influential (and also its most outspoken) executive.
To be juggling leadership roles at X (formerly Twitter), Tesla, SpaceX, xAI, the Boring Company and Neuralink was already unsustainable. Musk now has wormed his way into Trump’s inner circle, and will jointly lead the president-elect’s DOGE – Department of Government Efficiency – in a bid to slash billions in government expenditure.”
Read more of David Swan’s predictions for tech in 2025 here.
You may have missed
Australia is one of the world’s wealthiest countries per capita and traditionally has one of the highest spending on alcohol per capita. Bottle shops around the country thrived during the COVID-19 pandemic, with a national surge in alcohol sales. However, spending on liquor has been trending downwards over the past few years. A key factor behind the decline is changing attitudes among young people.
Read more here.
with Bloomberg
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