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Macquarie told investors at its annual general meeting that it had Lower rate of return Due to weaker demand for its services, its funds have been used more this year than in the previous five years.
Among the local tech stocks that fell, software company Xero fell 3.5 per cent and WiseTech dropped 3.2 per cent.
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IG Australia market analyst Tony Sycamore said the Australian Stock Exchange fell to its lowest point in two weeks on Thursday.
“Trouble on Wall Street is spreading like wildfire across regional equities,” he said, with poor earnings from U.S. tech giants Tesla and Alphabet sparking a rapid deterioration in risk sentiment. “Regional equities are facing other problems closer to home — a worrisome slowdown in China and the looming threat of Trump’s tariffs, which will cause a further slowdown in China.”
The local market slide came after U.S. stock indexes suffered their worst losses of 2022 as results from Tesla and Alphabet helped soak up momentum from Wall Street’s enthusiasm for artificial intelligence technology.
Overnight, the S&P 500 fell 2.3%, its fifth decline in the past six days. The Dow Jones Industrial Average fell 1.2% and the Nasdaq Composite fell 3.6%.
Sam Stovall, chief investment strategist at CFRA, said the profit reports from Tesla and Alphabet weren’t disasters, but they raised questions among investors about which other market giants might fall short of expectations for spring results.
“How much disappointment are we likely to see? Maybe we sell first and ask questions later.”
Tesla, one of the market’s heaviest-hit stocks, fell 12.3 percent after reporting a 45 percent drop in spring profits and earnings that missed analysts’ expectations.
Tesla has become one of Wall Street’s most valuable companies not only because of its electric cars but also because of its artificial intelligence initiatives, such as self-driving taxis. UBS analyst Joseph Spak said the business is difficult to value and “the challenge is that the time frame and probability of success are unclear.”
Earnings expectations are high for U.S. companies in general, but especially for a small group of stocks known as the “Magnificent Seven.”
Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla need to continue to deliver strong growth as they are the main reason the S&P 500 has hit record highs this year at a time when many other stocks are struggling under the weight of high interest rates.
The hope on Wall Street is that if the Big Seven’s momentum does wane, more stocks beyond those big seven could rally to support the market. Hopes for an upcoming rate cut have helped small-cap stocks in particular reverse market leadership and surge in recent weeks.
The Russell 2000 index of small-cap stocks has risen at least 1% in seven of the past 10 days, though its momentum has also suffered setbacks. On Wednesday, the index fell 2.1%.
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Small-cap stocks rose as U.S. Treasury yields fell on expectations that inflation will slow enough to prompt the Federal Reserve to start cutting its key interest rate in September.
U.S. Treasury yields were mixed on Wednesday after preliminary data showed that U.S. manufacturing business activity contracted again, but services business activity continued to grow.
The overall data presents a “Goldilocks” scenario, where the economy is not too hot to put upward pressure on inflation, but not too cold to fall into recession.
In other international stock markets, European and Asian stock indexes plunged. France’s CAC 40 index fell 1.1%, and shares of luxury goods giant LVMH fell 4.7% in Paris after the company, which owns Louis Vuitton and Dior, reported quarterly sales that missed expectations.
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“Initially, these investments will not deliver financial returns unless governments step up their support,” Macquarie CEO Shemara Wikramanayake said of green hydrogen investments, acknowledging changes in climate policies in various countries. Will not undermine the long-term green energy transition.
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Mining giant Fortescue says it will Increase spending on green energy technologies And it reiterated its commitment to developing zero-emission hydrogen, although it scaled back its target to produce 15 million tonnes of hydrogen a year by 2030.
Associated Press
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