26 May 2025 | Weekly Snapshot

Saward Dawson > Wealth Advisory Insights > Weekly Snapshot > 26 May 2025

Did you know?

China is selling solar panels across Africa at an accelerating rate. This is shown in the below diagram, which shows quarterly solar imports from China across various African countries. The green bar shows the 3 months ending March 2025. This is good news for boosting incomes in some of the world’s most isolated and poorest regions.

Market Movements

The ASX was higher by 0.7% last week. Telcos led the way with Telstra up approx. 5%. Telstra’s mobile division continues to go from strength to strength, in part driven by continued price increase across their mobile plans. Utilities (down 0.7%) and Consumer Discretionary stocks (down 0.8%) were the weakest sectors. Nothern Star was among the strongest stocks (up 7.8%) reflecting renewed gold price momentum in turn driven by US$ weakness. Triggering this US$ weakness could perhaps be driven by higher yields on long term US treasuries, which reflects weakening investor appetite for US bonds at current yields. This is a big deal for investors, because the yield on US bonds is a key valuation mechanism (discount rate) across equities and any changes to the long-term rate will ripple through all markets.

In the USA, the S&P500 was lower by 2.7% with info tech (down 3.2%) and health stocks (down 3.8%) leading the way. Apple was lower by 6.5%. Not a lot is going right with Apple at present. Their AI strategy seems to be lagging their peers, sales growth has slowed to 2% and they are caught in the cross hairs of Trump’s tariff agenda. If Tim Cook (Apple CEO) is going to manufacture the iPhone in the USA, as Trump would have it, production costs are likely to jump significantly.

In economic news, the RBA cut the cash rate from 4.1% to 3.85% (as expected) and China’s retails sales came in at 5.1% (April).

The market’s rebound from April lows has been nothing short of impressive. The USA’s S&P500 is now back at 5,800 points and almost flat for the year. Valuations are again looking on the full-ish side at 21x next 12 months earnings (blue line in below chart). Tariff policy, US deregulation and yields on US bonds continue to dominate price action.

Portfolio Movements

James Hardie reports in line Q4 – Conditions still tough. Shares lower by 4.8%

James Hardie has reported Q4 results with Q4 earnings per share of $0.36, in line with expectations. Q4 revenue of $972M is slightly below the $984.5M expected. Conditions were hampered by high US interest rates with US mortgage rates still around 7%.
Management noted the more recent, broader macroeconomic uncertainty could further impact the cost of home construction and weigh on consumer sentiment, influencing demand. They are prudently planning for market volumes to contract in FY26.
FY26 guidance looks a bit light on with adjusted EBITDA growth and North America net sales growth both for low single digits.
James Hardie is a leading manufacturer of building materials used predominantly in the US home renovation market.

Novo Nordisk CEO to step down. Shares higher by 1%

Novo Nordisk announced that CEO Lars Fruergaard Jørgensen is to step down but will continue as CEO for a period to support a smooth transition to new leadership. With a search for a new CEO is ongoing, and an announcement will be made in due course.
The board and CEO have jointly concluded that initiating a CEO succession is in the best interest of the company and its shareholders, considering the recent market challenges, the share price decline, and the wish from the Novo Nordisk Foundation
Novo is a global healthcare leader in diabetes and weight loss drugs.

Worley maintains FY guidance at investor day. Shares flat for the week.

Worley held their Investor Day maintaining FY guidance for low double digit EBITA growth and underlying EBITA margin (ex-procurement) of 8.0-8.5%. which are both slightly above the current estimates.
Financial year-to-date bookings of $9.4B are up 22% from the $9B this time last year. Resources and Chemicals projects are surging although energy was lower, particularly in renewable energy projects.
CEO Chris Ashton said, “While we acknowledge current uncertainty in global markets, we are stronger than ever, with our business continuing to show resilience. We continue supporting our customers as they navigate this environment while maintaining strong financial discipline and building on the foundations that underpin our long-term growth.”
Worley is an engineering firm with global operations across energy, chemicals and resources.

The Week Ahead

Tuesday 27 May: USA Durable Goods Orders forecast -7.8% for April (prior 9.2%).
Wednesday 28 May: Australia CPI YoY for April forecast 2.3% (prior 2.4%).
Thursday 29 May: USA GDP Q1 annualised QoQ forecast -0.3% (prior -0.3%), Personal Consumption Q1 forecast 1.7% (prior 1.8%), Core PCE Price Index Q1 QoQ forecast 3.5% (prior 3.5%), Initial Jobless Claims for May forecast 230k (prior 227k).
Friday 30 May: USA Personal Income for April forecast 0.3% (prior 0.5%), Personal Spending for April forecast 0.2% (prior 0.7%). Australia Retail Sales MoM for April forecast 0.3% (prior 0.3%).
Saturday 31 May: China Manufacturing PMI for May forecast 49.5 (prior 49.0)

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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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