ASX a sea of red as Wall Street tumbles to wrap up ugly April

“While Woolworths Group and Endeavour Group remain important business partners, with a number of long-term partnership agreements in place, we no longer believe that a material equity investment in Endeavour Group is required as Endeavour Group approaches its three-year anniversary as an independent listed company,” said Woolworths CEO Brad Banducci.

“We currently have no intention to sell the remaining stake, but will continue to assess what we believe is in the best interests of Woolworths Group shareholders.”

In other news at Endeavour, managing director of its ALH Hotels unit Mario Volpe passed away following a long illness. Paul Walton will continue to act as managing director.

The lowdown

The ASX losses were broad-based, with higher-than-expected US labour costs data feeding into worries that the Federal Reserve may need to keep official interest rates higher for longer.

Unsurprisingly, interest-rate sensitive stocks were among the worst affected, with technology giant WiseTech losing 4.3 per cent.

Gold companies also slipped, with Northern Star shares down 3.4 per cent and Newmont shedding 2.2 per cent as the gold price slipped almost 2 per cent.

Energy (down 2 per cent) was the weakest sector, as Brent Crude oil prices dropped 0.9 per cent.

On Wall Street, the market closed its worst month since September.

The S&P 500 Index tumbled 1.6 per cent to cement its first losing month in the past six. Its momentum slammed into reverse in April, falling as much as 5.5 per cent at one point, after setting a record at the end of March.

The Dow Jones Industrial Average dropped 1.5 per cent and the Nasdaq Composite Index lost 2 per cent.

Stocks began sliding as soon as trading opened after a report showed US workers won bigger gains in wages and benefits than expected during the first three months of the year. While that’s good news for workers and the latest signal of a solid job market, it feeds into worries that upward pressure remains on inflation.

The latest data follows a string of reports this year that show inflation remains stubbornly high.

Traders have largely given up on hopes that the Fed will deliver multiple cuts to interest rates this year. That, in turn, has sent Treasury bond yields jumping, which has ratcheted up pressure on stocks.

The Fed will make its latest decision on US interest rates on Wednesday (US time).

No one expects the central bank to change its main interest rate, but traders are anxious about what Fed Chair Jerome Powell may say about the rest of the year.

Traders are mostly betting the Fed will cut rates either one or zero times through the balance of 2024, according to data from CME Group. That’s a big letdown after traders came into the year forecasting six or more cuts.

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“Few in the retail scene and more broadly in business would have ever predicted that a retailer of this nature – ultra-cheap, fast fashion from China – would have established a foothold of this magnitude in Australia,” said Roy Morgan retail and consumer trends expert Laura Demasi after ultra-cheap Chinese fashion retailer Shein’s local operation raked in nearly $1 billion in sales and tripled its profits in 2023.

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With AP

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