Source : THE AGE NEWS
By Angus Delaney
The Australian sharemarket has dipped on Monday, following US futures lower as investors reacted to ratings agency Moody’s stripping the US of its AAA credit rating and deepening concern that growing debt will damage America’s standing as the choice destination for global capital.
The S&P/ASX200 dropped 3.8 points, or 0.1 per cent, to 8339.90 shortly after midday. Six of 11 industry sectors were in the red, with materials and energy stocks weighing on the bourse.
The ASX opened lower on Monday. Credit: Louie Douvis
At about midday Monday, Newmont Corporation, up 2.8 per cent, bucked the trend of the materials sector to be among the biggest risers, while a fall in iron ore prices caused BHP (down 1.7 per cent), Fortescue (down 2.3 per cent) and Rio Tinto (down 1.5 per cent) to fall. Mineral Resources (down 5.2 per cent) slumped as it unveiled its new chair, Malcolm Bundey, who will take over from James McClements on July 1.
Energy companies fell after oil prices dropped. Santos shed 1.2 per cent and Woodside lost 1 per cent.
The Commonwealth Bank rose 0.88 per cent while the rest of the big four banks had minor falls. An interest rate cut by the RBA on Tuesday is expected by all Big Four banks.
Struggling pizza giant Domino’s is on the hunt for a new chief executive of its Australia business after the resignation of Kerri Hayman, sister of former CEO Don Meij, who has been in the role for little more than half a year. Domino’s shares are 1.7 per cent lower.
Location sharing software company Life 360 is up 2.4 per cent.
King Charles’ property firm The Crown Estate and Australian property giant Lendlease have confirmed they will start a joint venture in the United Kingdom.
Lendlease, a $3.8 billion ASX-listed property developer, said on Monday it has finalised a deal with The Crown Estate after confirming last week it was in negotiations with the monarch’s firm. Lendlease has sold six development projects it owns in London’s boroughs and Birmingham into the joint venture with The Crown Estate, one of the UK’s largest property managers. Lendlease shares are 1.4 per cent higher.
Rating agency Moody’s lowered the US credit score to Aa1 from AAA on Friday (US time), joining Fitch Ratings and S&P Global Ratings in grading the world’s biggest economy below the top, triple-A position.
The downgrade, which occurred after the US stockmarket had closed, caused US Treasury yields to move higher. It also increased appetite for haven assets and boosted gold after its biggest weekly decline in six months.
The one-notch cut from Moody’s comes more than a year after Moody’s changed its outlook on the US rating to negative. The credit assessor now has a stable outlook.
“While we recognise the US’ significant economic and financial strengths, we believe these no longer fully counterbalance the decline in fiscal metrics,” Moody’s wrote in a statement.
The White House on Friday cast the move as a political decision. Steven Cheung, a spokesman for President Donald Trump, singled out Mark Zandi, an economist for Moody’s Analytics, in a post on X, accusing him of being a long-time critic of the administration’s policies.
Wall Street posted another winning session, but Moody’s announced lowered the US credit score to Aa1 from Aaa an hour after the session closed on Friday in New York.Credit: AP
“Nobody takes his ‘analysis’ seriously. He has been proven wrong time and time again,” Cheung said. Moody’s Ratings is a separate group from Moody’s Analytics. Zandi did not immediately reply to a request for comment on Friday evening.
Before the Moody’s downgrade, equities had climbed in regular hours Friday as the Financial Times reported the US and the European Union broke an impasse to enable tariff talks, fuelling the risk-on tone that had been sparked by the recent cooling in trade tensions with China.
Traders were able to look past data showing US consumer sentiment unexpectedly fell while inflation expectations hit multi-decade highs.
Trump’s trade war had sent financial markets reeling worldwide because of twin dangers. On one hand, tariffs could slow the economy and drive it into a recession. On the other, tariffs could push inflation higher.
This week featured some encouraging news on each of those fronts. The United States and China announced a 90-day stand-down in most of their punishing tariffs against each other, while a couple of reports on inflation in the United States came in better than economists expected.
with Bloomberg, AP
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.
