7 July 2025 | Weekly Snapshot
Saward Dawson > Wealth Advisory Insights > Weekly Snapshot > 7 July 2025
Did you know?
According to Nvidia’s CEO Jensen Huang, self-driving cars could become the next trillion-dollar industry. Both China and the USA are leading the way here with 37% and 32% of total self-driving deployments, respectively.
Market Movements
The Australian market was higher by 1.1% last week, led by resources (up 3.3%). Financials led the market lower (down 1.2%), which characterises a switch of funds from, potentially, the expensive banks to the cheaper resources. Lithium miner Pilbara was the stronger resource stock, up 13.5%.
In the USA, the S&P500 was higher by 1.2%. Similar story with materials leading the market higher (up 2.6%). Health stocks were the weakest (down 1.7%). There was some evidence of post 30-Jun profit taking amongst the leading stocks. Netflix (down 2%) and Meta (down 2.6%) both lower for the week with both stocks boasting strong calendar year-to-date returns (up 46% and 23% respectively).
The “One Big Beautiful Bill Act” was passed in the USA. It is a highly pro-growth spending bill aimed at turbo charging the private sector, including on-going tariffs to support local industry. The aim is to reduce the US debt-to-GDP ratio by increasing GDP at a faster rate than the increase in the debt.
Economic data was generally positive with Australia retail sales up 0.2% m/m for May, U.S. nonfarm payrolls up 147,000 for May and Eurozone CPI inflation up 2.0% y/y for June.
CBA finished the year near record prices, reaching $190 before pulling back. The price gains have come without earnings growth (green line below showing earnings per share or EPS). The 1987 stock market crash showed investors to be careful of such occurrences. The valuation of CBA is at record 28 x earnings (or a price to earnings ratio of 28x, blue line below).
Is the market right, is CBA nearing a new dawn of earnings growth, justifying these lofty valuations? Possibly. But sometimes, extreme things happen in markets and today’s CBA share price looks like one of those.
What could be the catalyst for a de-rating back to normal territory? It could come from
- falling house prices or
- fast rising unemployment or
- do investors fall in love with other, cheaper stocks, such as BHP, which trades at less than half the valuation?
House prices are currently rising, employment is flat, which leaves the switch into other opportunities as the most likely short-term opportunity. It is also possible that CBA stays flat or keeps rising. Time will tell. But history will show the returns for CBA shareholders, going forward, is skewed.
Portfolio Movements
Microsoft to lay off another 9,000 employees
- Microsoft began its new financial year with a new round of layoffs saying as much as 4%, or roughly 9,000, of the company’s employees could be affected.
- During the May layoffs, Microsoft emphasized that it wanted to flatten management layers and has emphasized that the cuts aren’t performance related. With some speculation the cuts could potentially be to do with AI efficiency and productivity gains although the company has not said that.
- Microsoft had over 228,000 employees worldwide as of June 2024.
Woolworths consolidates marketing material into Adobe’s platform
- Woolworths has consolidated 30,000 marketing assets into Adobe’s digital asset management (DAM) platform, building a repository for its multiple brands’ marketing material as part of a program focused on improving discoverability, reuse, and operational efficiency
- Housed within Adobe Experience Manager, the digital asset management system acts as a centralised platform for storing, organising, and distributing marketing assets, including images, videos, and campaign content.
- The adoption also sets the marketing team up for future artificial intelligence initiatives from Adobe.
JP Morgan and Bank of America to increase dividends
- JP Morgan and Bank of America, having recently passed the Federal Reserve’s 2025 stress tests, have both announced dividend increases.
- JPM announced it intends to increase the quarterly dividend to $1.50 per share from the current $1.40 per share for Q3 of 2025.
- BAC announced plans to increase its quarterly dividend to $0.28 per share from $0.26 beginning in Q3 of 2025. A nice 7%-8% dividend increase to shareholders from both.
The Week Ahead
- Tuesday: RBA interest rate decision. Markets are expecting a interest rate cut from 3.85% to 3.6%
- Wednesday: The US central bank release minutes from their last meeting. Investors will be looking for clues around the timing of interest rate cuts, which according to many market participants, are now long overdue.
- Friday: Germany inflation data, which is expected to show a flat inflation reading of 2%
Saward Dawson Wealth Advisors Pty Ltd, a Corporate Authorised Representative of Akambo Pty Ltd t/a Accountants Private Advice
The information presented in this publication is general information only, and is not intended to be financial product advice. It has not been prepared taking into account your investment objectives, financial situation or needs, and should not be used as the basis for making an investment decision. Before making any investment decision you need to consider (with your financial adviser) your particular investment needs, objectives and financial circumstances.
Some numerical figures in this publication have been subject to rounding adjustments. Akambo Pty Ltd (including any of its directors, officers or employees) will not accept liability for any loss or damage as a result of any reliance on this information. The market commentary reflect Akambo Pty Ltd’s views and beliefs at the time of preparation, which are subject to change without notice.
