Markets flat as Chile privatises its lithium industry

The Dow Jones Industrial Average ended little changed Friday and finished lower for the week as investors evaluated the latest earnings results and concerns of disappointing profits.

Markets in Australia, Europe and the US are anticipating more economic data this week that could provide greater insight into inflation’s progress and the strength of economic activity across much of the world.

Consumer and producer price inflation this week for Australia, consumer inflation in the EU and America’s PCE inflation on Friday will temper market sentiment ahead of key meetings of central banks in Australia, the US, Britain and the EU in the first two weeks of May.

On Friday the 30-stock index DOW Jones index added 22.34 points, or 0.07 per cent, to end at 33,808.96, while the S&P 500 eked out a 0.09 per cent gain to settle at 4,133.52. The Nasdaq Composite rose 0.11 per cent to close at 12,072.46.

China’s economy appears to have bounced back, kind of. In its first full quarter since Beijing lifted punishing Covid restrictions, the world’s second-largest economy beat expectations on the back of surging consumer spending, rising exports and government-led infrastructure investment. But youth unemployment hit 19.6 percent, its second-highest mark on record, suggesting that businesses are not convinced that Beijing is finished dabbling in the private sector and that economic uncertainty is over.

Earnings season continued Friday, with results from Procter & Gamble. The consumer products company gained 3.5 per cent after beating expectations and lifting it sales forecast. As of Friday morning, 76 per cent of S&P 500 companies reporting earnings so far have beaten analyst EPS estimates, according to FactSet.

Elsewhere, materials stocks were the worst performers, with Freeport-McMoRan falling 4.1 per cent after posting a year-over-year decline in its quarterly results.

While shares in the world’s top two lithium producers -Albemarle and SQM – tanked on Friday after Chile moved to take control of the country’s lithium industry by saying contracts with the two giants would not be renewed under a new public-private partnership model. Chile has the 3rd largest lithium reserves in the world. Investors dumped the shares on Friday – with SQM losing more than 18 per cent in value to a 52-week low while Albemarle slumped 10 per cent, also hitting a year low.

Earnings season will continue this week with results on deck from Big Tech companies Amazon, Alphabet, Meta Platforms and Microsoft.

Overall, overnight, the S&P500 sectors were mixed. Consumer Discretionary led the day, closely followed by Consumer Staples, whilst Materials trailed behind.

Futures

The SPI futures are pointing to a 0.1 per cent fall.

Currency

One Australian dollar at 7:10 AM is buying 66.97 US cents..

Commodities

Iron ore futures are pointing to a 2.8 per cent fall.

Gold lost 1.42 per cent. Silver fell 1.23 per cent. Copper shed 1.14 per cent and oil gained 0.65 per cent.

Figures around the globe

Across the Atlantic, European markets closed higher. London’s FTSE added 0.15 per cent, Frankfurt gained 0.54 per cent while Paris closed 0.51 per cent higher.

In Asian markets, Tokyo’s Nikkei lost 0.33 per cent, Hong Kong’s Hang Seng dropped 1.57 per cent and China’s Shanghai Composite closed 1.95 per cent lower.

On Friday, the Australian sharemarket closed 0.43 per cent lower at 7330.

Dividends payable

Latitude Group Holdings (ASX:LFS)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

Disclaimer

The views, opinions or recommendations of the commentators in this presentation are solely those of the author and do not in any way reflect the views, opinions, recommendations, of Sequoia Financial Group Limited ABN 90 091 744 884 and its related bodies corporate (“SEQ”). SEQ makes no representation or warranty with respect to the accuracy, completeness or currency of the content. Any prices published are accurate subject to the time of filming and shouldn’t be relied upon to make a financial decision. Commentators may hold positions in stocks mentioned and companies may pay FNN to produce the content at times. The content is for educational purposes only and does not constitute financial advice. Independent advice should be obtained from an Australian Financial Services Licensee before making investment decisions. To the extent permitted by law, SEQ excludes all liability for any loss or damage arising in any way including by way of negligence.
Copyright 2023 – Finance News Network