Weekly Market Update – 03 May 2021

U.S Earnings beat estimates; markets remain indifferent

Global equity markets remained relatively flat last week, falling only 0.36% as represented by the MSCI World Index in AUD terms.

The S&P 500 secured its third straight month of gains in April with first-quarter earnings out from the U.S. last week beating over 87% of analyst’s forecasts.

The FAAMG group (Facebook, Apple, Amazon, Microsoft, and Google) which reported all last week posted impressive numbers to no surprise, though the market’s reaction to the news was rather muted.

CPI Data

Quarterly Consumer Price Index data out last week from the ABS surprised, with figures coming in unexpectedly lower than economist’s forecasts.

The Australian Consumer Price Index rose by 0.6% for the first quarter of 2021, which was 0.3% lower than economists’ forecasts. Moreover, CPI lifted 1.1% on a year-on-year basis, which again fell below the market’s consensus expectations of 1.4%.

Forecasts by economists anticipated that the surge in construction alongside shortages within the Labour market and increased dwelling costs would consequently result in a jump of inflationary data, though evidently, that was not the case.

Government housing grants such as the HomeBuilder scheme helped offset the increased prices of dwellings, labour and materials, though next quarter’s data in June may see these increased costs flow through with the scheme now being terminated.

Federal Reserve Update

The United States’ central monetary authority met Wednesday to reaffirm its bond-buying program and continue its parked position on interest rates.

Despite the strengthening of the global economy and increasing prospects for recovery domestically in the U.S, the central bank repeated its guidance, stating that ‘substantial further progress’ must be seen towards employment and inflation metrics before easing the bond purchases that have deflated interest rates.

Whilst some investors have pointed to higher commodity prices as indicative of supply chain and inflationary pressures, Federal Reserve chairman, Jerome Powell stated that ‘creeping U.S inflation won’t last and doesn’t justify higher interest rates’.

ASX Weekly Wrap   

The benchmark S&P/ASX200 index remains close to, though yet to breach its best-ever close as markets retreated a mere 43.21 points, or –0.50 per cent, to 7017.5.

The prevailing narrative we have discussed previously of the ‘shift from growth to value’ continued in full swing this week, with Utilites, Industrials and Financials, being the best performing sectors with Utilites leading the way rising +0.56%. On the contrary, the more speculative Information Technology retreated 2.26%, led by the continuing fall in Nuix Ltd (NXL), which saw its share price contract -10.2% as management confessed they would fall short of its prospectus target for key financial metrics.

Surprisingly, Consumer Staples was the sector that led losses on the ASX, contracting –3.44% throughout the week. Poorly received quarterly updates from Woolworths Group (WOW) and a drag on Wesfarmers Ltd (WES) share price can be pointed to for blame.

Elsewhere and pertinent to most Australian portfolios is the habitual, positive performance of miners, BHP, Rio Tinto and Fortescue Metals Group of late. With a basket of commodities at or near all-time highs, Australian large-cap miners have continued to benefit from decade-high iron ore prices.

On a positive note for client portfolios, Cleanaway Waste Management (CWY) led the charge in value stocks, and was one of the benchmarks best performers, rising 9.6% over the five days of trading and breaching its 52-week high.

The positive move in CWY’s share price comes despite the termination of a significant rescaling of a promising merger and acquisition deal with French-Based Waste Manger Suez. The new, smaller deal will see CWY acquire a portfolio of Suez’s Australian–based assets (as opposed to its entire Australian-based business), which the market evidently viewed as positive.

Looking ahead

Monday 3rd May 2021 – Friday 7th May 2021

  • Monday: US Fed Chair Jerome Powell Speech
  • Tuesday: AU RBA Interest Rate Decision, US Balance of Trade
  • Wednesday: N/A
  • Thursday: UK Bank of England Interest Rate Decision and Quantitative Easing Update
  • Friday: US Non-Farm Payroll Figures

Friday 30th April, 5pm values

All Ordinaries 7218-34-0.5%
S&P / ASX 2007018-43-0.6%
Property Trust Index1468+2+0.2%
Utilities Index6160+28+0.5%
Financials Index6244+21+0.3%
Materials Index16846-88-0.5%

Friday 30th April, closing values

U.S. S&P 5004182+20.0%
London’s FTSE6973+39+0.6%
Japan’s Nikkei28822-187-0.7%
Hang Seng28715-340-1.2%
China’s Shanghai3446-28-0.8%

Key dividends

Monday 3rd May 2021 – Friday 7th May 2021

  • Monday: Div Pay-Date – Harvey Norman Holdings (HVN)
    Div Ex-date – Betashares Legg Mason Aus Bond Fund (BNDS)
  • Tuesday: N/A 
  • Wednesday: Div Ex-Date – Bank of Queensland (BOQ)
  • Thursday: N/A
  • Friday: Div Pay-Date – APN Industrial REIT (ADI), APN Convenience Retail REIT (AQR)


Mark Johnson – Chairman of Investment Committee(03) 8825 4738
Guy Silbert – Investment Manager(03) 8825 4750

If you would like to discuss your situation, please speak to your adviser or email clientservices@primefinancial.com.au

Mark JohnsonT: (03) 8825 4738Cameron MorcherT: (03) 8825 4737
Livio Caiolfa T: (03) 8825 4748Michelle BromleyT: (03) 8825 4751
Marcus AingerT: (02) 9134 6292Nicole LewisT: (03) 8825 4734
Dylan CresswellT: (03) 8825 4707 Nicholas Miller T: (03) 8825 4722
Jarrod Rodda T: (03) 8825 4729

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