ASX surges but fears remain; Myer downgrades on sales drop; 'bleisure' is back

ASX surges but fears remain; Myer downgrades on sales drop; 'bleisure' is back

News in brief

Cost-of-living pressures has put Myer under pressure. Yesterday it said sales this financial year would be flat at about $4 billion. Sales surged in May but slumped in June and July as interest rate hikes and worries about higher costs made shoppers nervous.

 

Fortescue boss Andrew Forrest has pleaded with China to “negotiate fairly” in an escalation of the iron ore miner’s battle with a powerful buying entity set up by Beijing to influence prices and the terms of supply contracts.

 

Perpetual’s share price rose three per cent yesterday after the fund manager got a revised, non-binding proposal from EQT. The trading price remains well below the offer price, because of the highly conditional nature of the proposal from EQT.

 

The share price of Chinese chipmaker CXMT, which debuted on the Shanghai index yesterday, surged more than 500 per cent as investors flocked to the company amid booming demand for AI memory chips.

 

Bleisure travel is back. That’s combining business and leisure, tacking on extra day to a work trip, bringing a friend along for a conference, or anything that adds fun to an otherwise stodgy business travel. 83 per cent of American business travellers at least occasionally turn a work trip into leisure, according to Skyscanner.

Fear-o-meter

The ATO’s “don’t” checklist for tax time:

 

Don’t be tempted to overclaim deductions or inflate expenses. The ATO has sophisticated data-matching and analytics that can quickly identify claims that don’t stack up. The ATO may hold your refund for further investigation if it looks suspicious.

 

Don’t forget to report all income. This includes income from side hustles, cash jobs, rental properties, and online activities and content creation. If you exclude income, the ATO may amend your tax return and you may need to pay interest and penalties.

 

Don’t ‘copy and paste’ from your previous years’ returns. If your job or circumstances have changed, this needs to be reflected in your claims and return.

 

Don’t act on information from third-party sources such as artificial intelligence platforms, ‘finfluencers’, or advice from family or friends without verifying the information with a registered tax professional or the ATO.

 

Don’t claim the newly announced $1,000 standard work-related deduction. This doesn’t apply until Tax Time 2027.

Fear & Greed Q+A today

Big Tech has spent hundreds of billions of dollars building the AI future. Now investors are starting to ask the obvious question: where are the returns? Josh Gilbert explains why Meta is arguably the most exposed, why Tesla investors' patience is wearing thin, and how Alphabet's results last week changed the AI conversation:

 

“Alphabet really showed us what the market is looking for with this AI trade. They showed real profits from the spending. Google Cloud saw growth of more than 80 per cent, cloud profits more than tripled and margins hit record levels. That's exactly what investors want to see—the AI build-out actually paying off. Search also held up really well, showing AI isn't replacing Google's core business, it's actually driving more searches.

 

But what overshadowed everything was the increase in capital expenditure guidance to as much as US$200 billion this year. Free cash flow actually went negative for the first time since Alphabet listed back in 2004. This is a company that has never burned cash as a public business, and now it is. Management has also told investors that pressure on free cash flow is going to continue into next year.”

The local sharemarket surged 1.4 per cent yesterday – one of the strongest days in six weeks – on the back of a lull in fighting in the Middle East and slight relief in the oil price. But few investors are sure about the trajectory from here, with inflation data tomorrow critical, as is what happens in Iran.

 

By the close, the market was at just under 8900 points, the highest level since mid-June. It is a little over three per cent off its all-time high hit in February this year, and yesterday’s moves reflected a surge in tech stocks, as well as general strength across most sectors, with the exception of energy.

 

Oil prices had hit $US100 a barrel late last week after US President Donald Trump warned that the US was “considering a massive attack, bigger than ever before” on Iran. Then over the weekend, the US stopped firing, possibly because it is running down munitions, or possibly because the Trump Administration is worried about oil prices and domestic politics.

 

What it does show is that the TACO trade continues to dominate sentiment. “Trump always chickens out” has held true so far. Investors believe that the US President wants a negotiated settlement, not all out war.

Greed-o-meter

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WiseTech Global topped the list of the most-traded Australian stocks last week, according to CommSec:

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Source: CommSec