ASX jumps as Wall Street breaks losing streak, CBA hits record high

Welcome to your five-minute recap of the trading day.

The numbers

The Australian sharemarket lost some steam in the afternoon but still closed in the green after being buoyed by a healthy lead from Wall Street, which rebounded from its worst week in almost 18 months.

The S&P/ASX 200 finished 23.8 points, or 0.3 per cent, higher at 8011.9 points, kept afloat by energy and banking stocks and pulled lower by miners.

Wall Street has risen across the board to start the week. Credit: AP

The lifters

Paladin Energy finished the session at the top of the bourse with gains of 5.9 per cent, knocking PolyNovo (up 5.1 per cent) off its perch. Boss Energy closed 4.5 per cent higher.

The banking sector was a solid performer for most of the day, finishing 0.6 per cent higher, but ended on a mixed note.

Commonwealth Bank gained 1.5 per cent and hit a record high of $145.24 in the session and Westpac climbed 1.4 per cent. NAB closed flat and ANZ slid 0.4 per cent. Macquarie shares closed 1.6 per cent higher at $227.36 after earlier hitting a record $228.50.

The energy sector finished the best-performing sector of the day with gains of 0.9 per cent, lifted by Woodside (up 0.8 per cent).

BHP was down 0.3 per cent while Rio Tinto closed 0.3 per cent higher. Fortescue ended the session 2 per cent weaker.

The laggards

General insurance broker Steadfast Group plummeted to the bottom of the bourse after suspending trading on the ASX after the ABC published a report alleging the $5.9 billion company was part of opaque schemes to pay strata management firms a cut of the fees apartment owners pay. Steadfast Group shed 10.7 per cent of its share price value.

Life360 finished 8.1 per cent lower, and Eagers Automotive finished 2.9 per cent lower.

The lowdown

Data from NAB’s business survey and Westpac’s consumer survey both shifted downwards in August, and economists are predicting unemployment is only going to keep moving in one direction.

“The RBA fully expects unemployment to rise and has indeed forecast the unemployment rate to reach 4.4 per cent by December 2024, and importantly, stay there until December 2026,” CreditorWatch chief economist Anneke Thompson.

“However, given we are already at a seasonally adjusted 4.3 per cent unemployment rate, these deteriorating leading indicators suggest we are now running a real risk of overshooting these unemployment forecasts.

“This measure will absolutely be one to watch over the next few months, as it will be in the USA and other major economies, and will be key to the timing of the first cash rate cut.”

Retail giant and Smiggle and Peter Alexander operator Premier Investments finished 0.8 per cent lower, following Monday’s losses, when it suddenly terminated the outgoing managing director of Smiggle, John Cheston.

Cheston is due to start as the new chief executive of youth jewellery retailer Lovisa next year. Lovisa shares closed 0.6 per cent lower.

On Monday, the S&P 500 rallied 1.2 per cent, though it didn’t recoup all of its drop from Friday, let alone from the rest of the four-day losing streak that it broke. The Dow Jones rose 484 points, or 1.2 per cent, and the Nasdaq composite gained 1.2 per cent.

Boeing climbed 3.4 per cent after reaching a tentative deal with its largest union on a new contract that, if ratified, will avoid a strike that threatened to shut down aircraft production by the end of the week. Boeing said 33,000 workers represented by the International Association of Machinists and Aerospace Workers would get pay raises of 25 per cent over the four-year contract.

The Federal Reserve has been intentionally pressing the brakes on the economy through high interest rates to stifle high inflation. It’s about to start lowering rates later this month, which would ease the pressure on the economy, as it turns its focus toward protecting the job market and avoiding a recession. The question on Wall Street is if the Fed’s shift in focus will prove be too late.

Cuts to interest rates give stock prices a boost, but if an economic downturn does hit, it could more than offset such a benefit by dragging down profits for companies. That’s what happened in 2007, for example, when the global financial crisis wrecked the world’s economy and financial markets.

Tweet of the day

Quote of the day

“While we can understand how some could see a benefit to a visionary founder retaining outsized control for a limited duration of time, that potential understanding vanishes as super-voting power and the associated protections transition to others.”

That’s what hedge fund Starboard said in a letter to News Corp shareholders. As columnist Liz Knight writes, Starboard will need almost every non-Murdoch-affiliated shareholder to actually vote, and vote against the Murdochs, if it’s to weaken the Murdoch family’s grip on its publishing empire, News Corporation.

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A blockbuster two-week trial to decide the future control of some of the world’s most famous news brands in the Murdoch family empire begins this week.

Media mogul Rupert Murdoch, 93, is expected to appear in a courthouse in Reno, Nevada, some time after the case begins on Tuesday (Wednesday in Australia), to argue that handing control of his vast and influential assets to his eldest son Lachlan in the event of his own passing is in all their interests.

Our media reporter Calum Jaspan breaks down the Succession-style Murdoch family drama.

With AP

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