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ASX Market Update: May 7 Insights
Welcome to our live coverage of the ASX for Wednesday, May 7. Please refresh the page manually for the most current updates, and we welcome your feedback on how we can enhance this experience.
Aurizon’s Trading Update
[8:50 am] Aurizon has released a conservative trading update for the year ending April, noting decreases in network and bulk volumes by 2.3% and 19%, respectively. However, coal volumes did see a slight increase of 0.9%.
The company also reported that administrators were appointed for bulk customers Centrex and OneSteel Manufacturing, who collectively owe Aurizon $50 million. Depending on the outcomes for these companies, Aurizon may need to adjust its provision for impaired receivables.
Furthermore, Aurizon has reaffirmed its guidance for FY25 adjusted EBITDA, expecting it to be on the lower end of the $1.66 billion to $1.74 billion range. Analysts largely anticipate an adjusted EBITDA of approximately $1.66 billion.
Featured Articles from Livewire
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The Yips: Markets, like athletes, can stumble under pressure. This was evident in the S&P 500, which witnessed a staggering 10.5% drop over just two days and a record 532-point intraday fluctuation in April, largely due to tariff uncertainties and dwindling investor confidence. Such volatility, highlighted by a soaring VIX, can provide investment opportunities, such as selling put options to benefit from inflated levels of market anxiety.
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3 ASX Stocks Benefiting from Labor’s Re-election: The recent electoral victory for Labor and its reinforced Senate position bodes well for increased funding in sectors like health, education, and renewable energy. Companies such as Generation Development Group, Mayfield Childcare, and Energy One stand to benefit from supportive policies and planned reforms, presenting promising investment prospects.
- Steve Johnson from Forager on Beating the Market: Despite trade tensions stemming from tariff disputes under the previous administration, Steve Johnson is optimistic about U.S. companies with strong leadership. He is tapping into undervalued equities in Europe and Japan, which offer attractive dividends and returns. His AusEquities Fund’s performance, showing a 21.7% return, highlights his prowess in identifying overlooked small-cap stocks amidst market shifts rooted in passive investing trends.
U.S. Consumer Spending Trends
[8:45 am] In a recent survey by Morgan Stanley, U.S. consumer sentiment regarding spending has worsened. Key findings reveal:
- 43% of consumers express "very high concern" about tariffs, a rise from 36% in the previous survey and 28% in January.
- 42% intend to cut spending, a significant increase from 35% last month.
- 19% plan to boost spending, down from 25%.
- Spending on dining out has emerged as a primary area where consumers will curtail expenditures if prices continue to increase.
Factors Pressuring Stocks
[8:40 am] Today’s trading session has been relatively quiet, with limited updates on macroeconomic indicators, earnings, and trade developments:
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Guidance Withdrawals: Recent guidance withdrawals from notable companies such as Ford and Mattel due to uncertainties related to tariffs and broader economic conditions have raised concerns. Clorox also mentioned challenges from macroeconomic headwinds, citing diminished consumer spending and destocking by retailers.
- Soft PMIs: The April services PMI in China has dropped to 50.7, marking a seven-month low, attributed to the influence of U.S. tariffs. Additionally, the U.K.’s services PMI has contracted for the first time since October 2023, reaching a rate of 49.0—its most rapid decrease in over two years.
Market Outlook
[8:35 am] The S&P/ASX 200 index is expected to face a third consecutive decline, particularly following a robust rally of approximately 12% from its lows in early April.
For new readers, be sure to catch up with today’s Morning Wrap for a comprehensive overview.
This summary captures the essential updates from the ASX on May 7, 2023, focusing on key market movements, company insights, and consumer trends, while maintaining clarity and coherence for Australian readers.
