Both the All Ordinaries (INDEXASX: XAO) and S&P/ASX200 (INDEXASX: XJO) fell 0.4% on Friday, but still managed to deliver a 2.3% gain for the week.
The mining and retailing sectors remain under significant pressure, despite news of stimulus from the Chinese banking sector.
Here’s what’s making news in the ASX 200…
Fortescue Metals Group Ltd (ASX: FMG)
The Fortescue Metals Group Ltd (ASX: FMG) share price fell another 5.3% on Friday after news that board member Guy Debelle would also be departing the embattled company just days after the companies’ CFO announced her intention to step down.
For Fortescue, this was enough to offset the positive sentiment that the Chinese government and central banks would be cutting interest rates and lowering the capital margin in an effort to stimulate growth.
On the positive side, was the energy sector, with Whitehaven Coal Ltd (ASX: WHC) gaining 4% and Boral Limited (ASX: BLD) 2.1% after the Stokes family confirmed they had no intention to sell down their holding further.
Over the week, every sector finished higher, led by retail, which added 3.4% and financials 2.6% on signs of an improving property sector.
Harvey Norman Holdings Limited (ASX: HVN) managed a 9.6% gain.
Dow Jones surges: best gain since June
The Dow Jones managed to post its strongest weekly gain since June, gaining 0.3% on Friday and taking the market to a 1.4% gain across the five days.
It was a similar story for the Nasdaq and S&P500 (INDEXSP: .INX), with both posting back to back weekly gains, up 2.5% and 3.2%, despite finishing 0.2% higher and down 0.02% on Friday.
Among the strongest performers were Dell Technologies Inc (NYSE: DELL) which gained more than 21% after the company reporting strong growth in its software storage solution and AI-powered services. Earnings were down on the prior quarter but forecasts were better than expected.
Athleisure wear producer Lululemon Athletica Inc (NASDAQ: LULU) gained more than 6% after the company reported an 18% increase in sales, spurred on by discounting and the strong brand. Same store sales were 11% higher, reflecting strength across the world for the global brand.
Unemployment in the US increased to 3.8%, after a significant slowdown in jobs growth was evidenced by just 187k new jobs gains in the month.
Owen Rask and I covered all this, and more, like NVIDIA’s blockbuster financial results, on the Saturday instalment of The Australian Investors Podcast. You can tune in, using the player above, or by navigating to our page for The Australian Investors Podcast.
China stimulus returns, property resilience grows
It has taken a little longer than expected, but the Chinese government appears to step into the fold and support the now sputtering economy.
News this week that the reserve requirement would be dropped from 6% to 4%, while a number of banks cut deposit rates in order to protect profitability were seen as a positive step to stimulate growth.
Rate cuts are important given the massive increase in savings post the pandemic, and seeks to stimulate consumption. This comes after the PMI results show the manufacturing sector returns to expansionary phase in July.
News this week that Sydney house prices had recovered another 1.1% in August has spurred hopes of a 10% gain for the year, as a shortage of property offsets the increasing cost of interest.
Finally, the Future Fund released performance data for the financial year, posting a return of 6%, which is at the lower end of most similar institutional investors. The reason being a decision to reduce risk in light of growing uncertainty and volatility.
