12 May 2025 | Weekly Snapshot

Saward Dawson > Wealth Advisory Insights > Weekly Snapshot > 12 May 2025

Did you know?

Did you know that US-listed Alphabet (formerly Google) owns the two most popular websites globally? And the competition isn’t even close. Google and Youtube, both owned by Alphabet, attract 136 billion and 73 billion visits per month. The next most visited website is Facebook with 13 billion visits per month followed by Instagram with 7 billion. Both of which are owned by Meta.

Market Movements

The Australian market was higher by 0.1% last week. Tech stocks (up 3.6%) and Utilities (up 3.2%) led the gains. The health sector was the only negative sector (down 3.2%). Qantas (up 8%) was among the best performers, who’s costs will decline on the back of the lower oil price.

In the USA, the S&P500 was higher by 0.2%. Health stocks were also lower in the USA by 1.0%, led by Eli Lilly (down 10.6%). Share price weakness reflected investor profit concerns in relation to tariffs, as was pointed out by the CEO of US healthcare major, Eli Lilly, during last week results season. Even with oil prices near US$60 per barrel, the energy sector was the best performing sector in the USA (up 2.1%). Constellation Energy (up 9.8%) was among the strongest stocks, reflecting confidence in the growth in energy volumes required for the industrial re-shoring to the USA.

The U.S. reached a trade deal with the U.K but the 10% universal tariff on most imports from the UK to the USA will remain in effect. The economic benefit of this deal is likely limited as the U.K. represented about 4% of U.S. exports and roughly 2% of U.S. imports, resulting in a U.S. trade surplus. The agreement does however, demonstrate that trade talks are progressing, and it could serve as a framework for further negotiations with other trading partners including China, with whom Trump has suggested that favourable negotiations are around the corner.

The USA’s Federal Reserve left the fed funds rate unchanged last week at 4.3%, as expected. They flagged risks of higher inflation and unemployment, otherwise known as stagflation. Monetary policy is likely restrictive given the fed funds rate is 4.3% and the Fed’s preferred measure of inflation – personal consumption expenditure (PCE) – is at 2.3%. Historically, a neutral policy rate is typically about 1% above inflation, which would suggest an interest rate target of closer to 3.3%. US Fed’s guidance is for 2 rate cuts this year and another cut early in 2026.

USA’s ISM services index rose to 51.6. This is a key economic reading related to the services sector, which represents more than 70% of the US economy. A reading above 50 means the services economy is expanding. This is welcomed positive news given broader tariff-related economic concerns.

Portfolio Movements

Orica reports strong first half – Shares rise 10% for the week

Orica reported first half EBIT of $472m, increasing 34% year on year.
The strong result was driven by strong customer demand in core blasting services, an increased contribution from Digital Solutions and Specialty Mining Chemicals, and higher earnings from high margin premium products and technology. The first half div also rose 24% to 25 cps. An the (up to) $400m on-market share buy-back announced a couple of months ago commenced.
The company provided a positive outlook with the first half momentum continuing in the 2nd half.
Orica is a global chemical manufacturing mining digital solutions company.

Macquarie reports FY results, profits up 5.5%, shares rise 5% for the week

Macquarie Group reported better than expected results with financial year NPAT up 5.5% to $3.72B (or EPS of $9.79) ahead of the expected EPS of $9.63.
The final dividend of $3.90 per share took the FY dividend to $6.50, ahead of the $6.36 expected.
FY profit growth was more subdued due to conditions in global energy and certain commodity markets, profits in Commodities and Global Markets were down, while they were up in Macquarie Asset Management due to improved asset realisations.
The company ended FY2025 in a strong position, with a common equity tier 1 capital ratio of 12.8%.

Broadcom announces solid result after market, shares rise 4% for the week

Broadcom stock dropped 6% during the day as it was caught up with the general market selloff but then soared 16% in after-market trading after releasing solid results.
Earnings per share of $1.60 beat estimates of $1.51. Revenue was a record $14.92B, up 25% from the year-ago quarter, also beating estimates of $14.59B.
AI revenue was the big winner up 77% YoY to $4.1B while software revenue was +47% at $6.7B.
The company said it expects continued strength in AI semiconductor revenue as hyperscale partners continue to invest in AI XPUs and connectivity solutions for AI centres.

The Week Ahead

Tuesday 13 May: USA CPI April MoM forecast 0.3% (previous -0.1%), YoY forecast 2.4% (previous 2.4%), CPI Ex Food & Energy April MoM forecast 0.3% (previous 0.1%), YoY forecast 2.8% (previous 2.8%).
Thursday 15 May: USA Initial Jobless Claims forecast 230k (prev. 228K), Industrial Production April MoM forecast 0.1% (prev. -0.3%), PPI Final Demand April MoM forecast +0.2% (prev. -0.4%), Empire Manufacturing May forecast -8.0 (prev. -8.1), Retail Sales Advanced MoM forecast +0.1% (prev. +1.4%). Australia Employment Change April forecast 20.0k (prev. 32.2k), Unemployment Rate April forecast 4.1% (prev. 4.1%).
Friday 16 May: USA Housing Starts April forecast 1,365k (prev. 1,324k), Building Permits forecast April forecast 1,450k (prev. 1,467k).

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Saward Dawson Wealth Advisors Pty Ltd, a Corporate Authorised Representative of Akambo Pty Ltd t/a Accountants Private Advice

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