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Energy surges on Woodside-Santos merger talks: Lithium rallies

Both local benchmarks finished the week on a positive note, with the All Ordinaries (INDEXASX: XAO) and S&P/ASX 200 (INDEXASX: XJO) gaining 0.3 per cent.

The materials and energy sectors were the biggest contributors, with the former gaining 0.6 per cent on resilient Chinese demand for iron ore.

BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) gained 0.7 and 0.9 per cent each with the latter hitting the highest level since 2021.

News that Woodside Energy Group Ltd (ASX: WDS) and Santos Ltd (ASX: STO) were seriously considering a merger buoyed the latter, which added 6.2 per cent as the smaller player in the deal, while Woodside shares fell on the news.

Lithium companies also boosted the local bourse, as Allkem Ltd (ASX: AKE) and Sayona Mining Ltd (ASX: SYA) jumped more than 4 per cent on improving prices.

Shares of Sigma Healthcare Ltd (ASX: SIG) remained in a trading halt as the company finalises the terms of the reverse takeover by Chemist Warehouse that shocked the market this week.

Over the week, the market managed a 0.3 per cent gain, as the energy sector contracted 1.3 per cent but real estate outperformed, up 3.5 per cent as the RBA kept rates on hold.

S&P500 hits six-week winning streak: Lululemon jumps despite downgrade

All three US benchmarks gained on Friday, buoyed by a stronger than expected jobs and unemployment result.

The Dow Jones Industrial Average (INDEXDJX: .DJI) gained 0.3, S&P 500 (INDEXSP: .INX) 0.3 and the Nasdaq Composite (INDEXNASDAQ: .IXIC) 0.4 per cent despite the market remaining somewhat directionless outside of earning season.

Strong jobs data saw 199,000 new jobs added in the month, sending the unemployment rate down to 3.7 per cent from 3.9.

The fear guage, which measures volatility in the market continues to fall, down to 12.4 points.

In company news, athleisurewear group Lululemon Athletica Inc (NASDAQ: LULU) surged 5 per cent after management indicated they had performed well despite an ‘uncertain’ environment while also downgrading sales expectations for the holiday period.

It was a similar story for Carrier Global Corp (NYSE: CARR) as the company received a takeover offer from Honeywell International Inc (NASDAQ: HON), sending shares of the air conditioner and vent provider up 4 per cent.

Across the week, the Dow fell 0.1, the S&P 500 gained 0.1 and the Nasdaq gained 0.7 per cent.

Bankers get creative: Woodside deal brings relevance

It was all about the takeovers this week, with news that Chemist Warehouse was set to finally enter the ASX and offer it’s long-term founders access to at least a small amount of liquidity.

News that Chemist Warehouse would be joining the ASX via a reverse takeover stands out as one of the more creative deals from the banking sector in recent years.

Similarly, news that Washington H Sl Pttnsn nd Cmpny Ltd (ASX: SOL) had sought to acquire Perpetual Ltd (ASX: PPT) showed a group that had gone full circle and put a number of other struggling fund managers in focus.

The surge in passive investing and alternative asset classes has made it difficult to be an incumbent active manager on the share market regardless of performance.

Finally, the potential Woodside-Santos merger could be the next world-class and world-scale business we have been waiting for with a potential $80 billion oil and gas play bringing relevance on the global stage.

The Golden Rules of Investing

We might be experts in retirement, but with combined financial advice experience of 35+ years, we’ve nearly seen it all. 

In mid-2023, our senior team at Wattle Partners Financial Planning put the finishing touches on a brand-new report “The Golden Rules of Investing“.

In this free report, we outline the key principles that determine all of the portfolio construction and investment decisions of Wattle Partners. Collated over decades, this paper should be seen as a work-in-progress, constantly under review in light of the ever-evolving nature of markets. 

You’ll find the free report on my Author page. Simply click the button below to view the Golden Rules.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, the author or their clients may have a financial interest in some of companies or securities mentioned.

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Wattle Partners is a financial advice firm, servicing clients around Australia, specialising in retirement planning (pre and post retirement). 

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