ASX jumps to two-month high, McDonald's sues former CEO for alleged sexual affairs

Australian shares have jumped to their highest levels since early June, building on yesterday’s optimistic sentiment.

By 1:55pm AEST, the benchmark ASX 200 was up 1 per cent to 6,172 points, while the broader All Ordinaries index had lifted by a similar level to 6,303.

The Australian dollar lifted (+0.4pc) to 71.8 US cents.

Biotech company Mesoblast was the worst-performing stock, following a 27.1 per cent tumble.

Mesoblast plunged after the US Food and Drug Administration raised doubts about the effectiveness of its stem cell-focused drug to treat COVID-19.

The FDA published a discussion paper ahead of a meeting on Thursday saying the drug, remestemcel-L, did not have a “demonstrated relationship with clinical effectiveness”.

‘Uncertainty’ and ‘volatility’ rock worst performers

Today’s weakest stocks also include investment firm Challenger (-4.8pc), Afterpay (-3.4pc) and gold miners such as Perseus Mining (-4.8pc) experienced the steepest losses.

Challenger fell after it reported a full-year statutory loss of $416 million due to what it called a “significant negative investment experience relating to the COVID-19 pandemic market sell-off”.

It was a steep downgrade compared with its profit last year ($307.8 million).

It will not pay a final dividend due to the “uncertain conditions” and “investment market volatility”.

Meanwhile, Coles has announced it will stop offering its weekly print catalogues by September 1.

The supermarket giant’s share price lifted sharply (+1pc). But that optimism was not shared by IVE Group, the advertising and marketing company which prints and distributes Coles’ catalogues.

IVE’s shares plunged by 19.1 per cent after it said its revenue would fall by $35 million to $40 million per year as a result.

Optimism rebounds

Moneyme was the best performer (+18pc), as investors piled into the emerging “buy now, pay later” category.

The small-cap company said it launched a new product, MoneyMe Plus, and the product roll-out was led by a team of Zip Co’s former salespeople.

Some other strong performers were construction and engineering firm CIMIC Group (+4.2pc), Webjet (+4.9pc) Stockland (+4.5pc) and BlueScope Steel (+4.5pc).

CIMIC shares jumped after the company, through its subsidiary CPB Contractors, was awarded contracts for resources and water projects in Queensland and Western Australia. It expects to earn revenue of $128 million from the two projects.

Sydney Airport swings to massive loss

Sydney Airport reported a heavy loss ($51.8 million) for the first half of 2020, and will not pay an interim dividend.

Widespread travel restrictions and border closures, to contain the coronavirus pandemic, have decimated its revenue. In the same period last year, the airport earned a massive $199.8 million profit.

In the meantime, Sydney Airport’s shares have been put in a trading halt while it tries to raise $2 billion by issuing more shares.

By raising extra cash, the company would reduce its net debt to $7.1 billion.

Three months ago, the airport operator said it did not foresee the need to raise equity, but that was before COVID-19 cases surged in the city of Melbourne, prompting border closures between states and further hurting travel and business.

“Six months into the pandemic, there remains uncertainty as to how long it will take for aviation markets to return to pre-COVID-19 levels,” the company said in a statement to the ASX.

James Hardie surges on rosy outlook

One of the strongest performers was James Hardie Industries (+6pc) after it reported a weak profit result — but upbeat forecast.

Its earnings were boosted by its North American business, on the back of more Americans turning to home renovation during the pandemic lockdown.

Operating profit margin for the North American division, its biggest earner, was 29 per cent in the first quarter (at the top range of its 27 – 29 per cent forecast).

Overall, the world’s largest fibre cement maker said its adjusted net “operating profit” (which excludes compensation costs) was $89.3 million in the June quarter, a slight drop from last year’s $90.2 million.

But its profit was much worse when those one-off compensation payments to workers claiming asbestos-related illness were included.

On that measure (which conforms with international accounting standards), its “statutory profit” had plunged 89 per cent to $9.4 million.

But the company is forecasting a strong underlying profit in the 2021-22 financial year, between $330 million and $390 million.

For reference, its operating profit was $352.8 million for the previous fiscal year — the mid-range of its new target.

The optimistic guidance, which sent the company’s shares higher, strikes a rare optimistic note at a time when many industries face profit declines due to shutdowns designed to slow the spread of the coronavirus.

Dozens of Australian companies have withdrawn guidance because of uncertainty caused by the outbreak.

However, Mr Truong said the guidance was based on improving home building and renovation in the United States since May.

He added the projection did not factor in the possibility of a second or third wave of the virus in the United States, where “half the country has to be shut down for weeks or months”.

Tech slips from record highs

On Wall Street overnight, the Nasdaq index slipped (-0.4pc) to 10,968 points, after consistently hitting new records in the past week.

The S&P 500 fell (-0.3pc) to 3,360 points and has nearly climbed back to its February record high.

The Dow Jones index was the best performer, jumping 358 points (or 1.3pc) to 27,791.

Investors pulled money out of big tech names like Amazon (-0.6pc) and Facebook (-2pc) and poured it into stocks like Boeing (+5.5pc) and energy companies, which have been more sensitive to the economic cycle.

They are also betting on a potential coronavirus vaccine being developed soon and unprecedented amounts of stimulus — which has been benefiting the stock market more than the real economy.

More recently, sentiment has been lifted by a better-than-expected quarterly earnings season, which has been exceeding the market’s very low expectations.

Former McDonald’s boss accused of sexual misconduct

McDonald’s is suing its former chief executive Steve Easterbrook to recoup tens of millions of dollars in severance and benefits.

The fast food giant alleges he covered up and lied about sexual relationships with at least three employees.

The lawsuit came nine months after McDonald’s ousted Mr Easterbrook without cause, after determining he had engaged in a “non-physical” and “consensual” relationship with an employee that violated the fast food chain’s policy.

Steve Easterbrook sitting in a studio dressed in a suit.Steve Easterbrook sitting in a studio dressed in a suit.
McDonald’s accused former chief executive Steve Easterbrook of lying about sexual affairs with employees.(AP: Richard Drew, File)

McDonald’s said it reopened the matter last month after receiving an anonymous tip and discovered Mr Easterbrook engaged in the sexual relationships with employees in the year before his departure.

Lawyers for the former McDonald’s chief did not immediately respond to requests for comment.

When he left McDonald’s, Mr Easterbrook called his consensual affair with an employee a “mistake,” and that it was “time for me to move on.”

His severance package was worth $US41.8 million ($57 million) when he left the Chicago-based company, executive pay firm Equilar has estimated.

But McDonald’s said Easterbrook no longer deserved that payout because of his “silence and lies,” and that had its board known the full picture it would have fired him “for cause.”

In its complaint in Delaware Chancery Court, McDonald’s said it had found dozens of nude or sexually explicit photos of women, including the three employees, that Mr Easterbrook sent to his personal email account from his company email account.

McDonald’s said Mr Easterbrook deleted the emails and attached photos from his company-issued phone shortly before his ouster, but they remained on a company server without his being aware.

It also said Mr Easterbrook approved an “extraordinary” stock grant of hundreds of thousands of dollars to one employee soon after their first sexual encounter and lied to investigators by denying any physical sexual relationships with employees.

Mr Easterbrook, a native of England, became McDonald’s chief executive in March 2015.

He had been credited with modernising the chain, introducing touch-screen kiosks and launching an all-day breakfast menu.

Investors did not know what to make of the latest developments with McDonald’s.

The company’s share price fluctuated between sharp falls (-0.9pc) and a modest rise (+0.4pc). In the end, it closed 0.3 per cent lower at $US204.12.

ABC/Reuters

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Asian markets extend rally as S&P 500 nears new record

Shares advanced in Asia on Tuesday, extending another rally that took the S&P 500 to within striking distance of its all-time high set in February.

Japan’s Nikkei 225 NIK, +1.76% added 1.7% and Hong Kong’s Hang Seng HSI, +2.28% gained more than 2.2% in early trading, even as the tally of confirmed new coronavirus cases worldwide topped 20 million, according to a tally by Johns Hopkins University.

In South Korea, the Kospi 180721, +1.62% picked up 1.7%. Sydney’s S&P/ASX 200 XJO, +1.02% jumped 1% and the Shanghai Composite index SHCOMP, +0.32% climbed 0.5%.

The gains followed President Donald Trump’s announcement over the weekend of stopgap moves to aid the economy, after talks on Capitol Hill for a bigger rescue package faltered.

Sentiment got an extra boost from signals that the talks might resume, and by Trump’s suggestion to reporters that he is planning a capital gains tax cut and a tax reduction also for “middle income” earners.

Overnight, the S&P 500 SPX, +0.27% rose 0.3%, to 3,360.47, after wavering between small gains and losses. The benchmark index is now within 1% of its last record high.

The Dow Jones Industrial Average DJIA, +1.30% rose 1.3% to 27,791.44. The Nasdaq composite COMP, -0.38% lost 0.4%, to 10,968.36.

Trump signed executive orders over the weekend to extend an expired benefit for unemployed workers, among other things. The orders were more limited than what investors hoped to see from a full rescue bill for the economy, but hopes remain that the White House and Congress will eventually reach a compromise.

Losses for technology stocks weighed on the market amid worries that worsening U.S.-China relations could mean retaliations against the U.S. tech industry.

The industry has mostly cruised through the pandemic, thanks to the need for tools for remote work and demand for online commerce and entertainment to weather business shutdowns and quarantine advisories. Critics had already been calling tech stocks overpriced, even after accounting for their huge and resilient profits.

Investors are looking to Washington for a fresh lifeline for the U.S. economy, which pancaked into recession as the pandemic gained ground in the spring.

On top of the rising number of coronavirus counts around the world, uncertainty has grown with widening antagonisms between the United States and China, the world’s largest economies. The latest move in their escalating tensions was China’s announcement of unspecified sanctions against 11 U.S. politicians and heads of organizations promoting democratic causes, including Senators Marco Rubio and Ted Cruz.

The two sides are scheduled to hold virtual trade talks at the end of the week.

Overall, the flood of government spending and monetary stimulus, with central banks buying assets to keep credit cheap, have kept markets rising since March.

“With the Fed buying credit and indirectly saving U.S. stocks, traders should not expect any major corrections even if the selling of tech stocks persists deeper into the trading week,” Edward Moya of Oanda said in a commentary.

The yield on the 10-year Treasury was steady at 0.58%.

Benchmark U.S. crude oil CLU20, +0.81% for September delivery gained 23 cents to $42.17 per barrel in electronic trading on the New York Mercantile Exchange. It rose 72 cents on Monday to settle at $41.94 a barrel. Brent crude oil for October delivery BRNV20, +0.53% picked up 14 cents to $45.13 per barrel. It rose 59 cents to $44.99 a barrel overnight.

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Asian shares extend rally; S&P 500 within 1% of record

Shares advanced in Asia on Tuesday, extending another rally that took the S&P 500 to within striking distance of its all-time high set in February.

Japan’s Nikkei 225 added 1.6% and Hong Kong gained more than 2% in early trading, even as the tally of confirmed new coronavirus cases worldwide topped 20 million, according to a tally by Johns Hopkins University.

The gains followed President Donald Trump’s announcement over the weekend of stopgap moves to aid the economy, after talks on Capitol Hill for a bigger rescue package faltered.

Sentiment got an extra boost from signals that the talks might resume, and by Trump’s suggestion to reporters that he is planning a capital gains tax cut and a tax reduction also for “middle income” earners.

The Hang Seng in Hong Kong added 2.1% to 24,877.14, while the Nikkei 225 climbed to 22,686.53. In South Korea, the Kospi picked up 1.3% to 2,418.91. Sydney’s S&P/ASX 200 jumped 0.9% to 6,167.10 and the Shanghai Composite index climbed 0.7% to 3,402.44.

Overnight, the S&P 500 rose 0.3%, to 3,360.47, after wavering between small gains and losses. The benchmark index is now within 1% of its last record high.

The Dow Jones Industrial Average rose 1.3% to 27,791.44. The Nasdaq composite lost 0.4%, to 10,968.36.

Trump signed executive orders over the weekend to extend an expired benefit for unemployed workers, among other things. The orders were more limited than what investors hoped to see from a full rescue bill for the economy, but hopes remain that the White House and Congress will eventually reach a compromise.

Losses for technology stocks weighed on the market amid worries that worsening U.S.-China relations could mean retaliations against the U.S. tech industry.

The industry has mostly cruised through the pandemic, thanks to the need for tools for remote

Read More Here...

Asian shares extend rally; S&P 500 within 1% of record

Shares advanced in Asia on Tuesday, extending another rally that took the S&P 500 to within striking distance of its all-time high set in February.

Japan’s Nikkei 225 added 1.6% and Hong Kong gained more than 2% in early trading, even as the tally of confirmed new coronavirus cases worldwide topped 20 million, according to a tally by Johns Hopkins University.

The gains followed President Donald Trump’s announcement over the weekend of stopgap moves to aid the economy, after talks on Capitol Hill for a bigger rescue package faltered.

Sentiment got an extra boost from signals that the talks might resume, and by Trump’s suggestion to reporters that he is planning a capital gains tax cut and a tax reduction also for “middle income” earners.

The Hang Seng in Hong Kong added 2.1% to 24,877.14, while the Nikkei 225 climbed to 22,686.53. In South Korea, the Kospi picked up 1.3% to 2,418.91. Sydney’s S&P/ASX 200 jumped 0.9% to 6,167.10 and the Shanghai Composite index climbed 0.7% to 3,402.44.

Overnight, the S&P 500 rose 0.3%, to 3,360.47, after wavering between small gains and losses. The benchmark index is now within 1% of its last record high.

The Dow Jones Industrial Average rose 1.3% to 27,791.44. The Nasdaq composite lost 0.4%, to 10,968.36.

Trump signed executive orders over the weekend to extend an expired benefit for unemployed workers, among other things. The orders were more limited than what investors hoped to see from a full rescue bill for the economy, but hopes remain that the White House and Congress will eventually reach a compromise.

Losses for technology stocks weighed on the market amid worries that worsening U.S.-China relations could mean retaliations against the U.S. tech industry.

The industry has mostly cruised through the pandemic, thanks to the need for tools for remote

Read More Here...

Sensex, Nifty Seen Flat To Higher At Open

Indian shares are seen opening higher on Tuesday, although underlying sentiment may remain cautious as investors grapple with worsening strains between Washington and Beijing as well as rising coronavirus cases both at home and abroad.

Over 68 percent of rural Indians were in a monetary crisis while 78 percent found work coming to a complete standstill due to the lockdown, a survey of 25,300 respondents from 23 states and union territories on the impact of the stringent lockdown in rural India found.

Benchmark indexes Sensex and the Nifty eked out modest gains on Monday while the rupee settled 3 paise higher at 74.90 against the U.S. dollar.

Asian markets rose this morning, the dollar held near a one-week high and oil extended gains to hover around $42 a barrel as New York, California and Texas reported a drop in coronavirus hospitalizations and investors assessed the progress in U.S. stimulus talks between Democrats and Republicans.

U.S. stocks ended mixed overnight as President Donald Trump signed executive orders aimed at extending coronavirus relief to Americans and Beijing announced it would sanction 11 U.S. citizens in response to similar measures from Washington.

The Dow Jones Industrial Average rallied 1.3 percent and the S&P 500 edged up 0.3 percent to reach their best closing levels in over five months, while the tech-heavy Nasdaq Composite index shed 0.4 percent.

European markets closed higher on Monday as investors reacted positively to last week’s encouraging data on U.S. jobs growth and signs of improvement in China’s industrial activity.

The pan European Stoxx 600 gained 0.3 percent. The German DAX inched up 0.1 percent, France’s CAC 40 index edged up 0.4 percent and the U.K.’s FTSE 100 added 0.3 percent.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Biotech Stocks Facing FDA

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Sensex, Nifty Seen Flat To Higher At Open

Indian shares are seen opening higher on Tuesday, although underlying sentiment may remain cautious as investors grapple with worsening strains between Washington and Beijing as well as rising coronavirus cases both at home and abroad.

Over 68 percent of rural Indians were in a monetary crisis while 78 percent found work coming to a complete standstill due to the lockdown, a survey of 25,300 respondents from 23 states and union territories on the impact of the stringent lockdown in rural India found.

Benchmark indexes Sensex and the Nifty eked out modest gains on Monday while the rupee settled 3 paise higher at 74.90 against the U.S. dollar.

Asian markets rose this morning, the dollar held near a one-week high and oil extended gains to hover around $42 a barrel as New York, California and Texas reported a drop in coronavirus hospitalizations and investors assessed the progress in U.S. stimulus talks between Democrats and Republicans.

U.S. stocks ended mixed overnight as President Donald Trump signed executive orders aimed at extending coronavirus relief to Americans and Beijing announced it would sanction 11 U.S. citizens in response to similar measures from Washington.

The Dow Jones Industrial Average rallied 1.3 percent and the S&P 500 edged up 0.3 percent to reach their best closing levels in over five months, while the tech-heavy Nasdaq Composite index shed 0.4 percent.

European markets closed higher on Monday as investors reacted positively to last week’s encouraging data on U.S. jobs growth and signs of improvement in China’s industrial activity.

The pan European Stoxx 600 gained 0.3 percent. The German DAX inched up 0.1 percent, France’s CAC 40 index edged up 0.4 percent and the U.K.’s FTSE 100 added 0.3 percent.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Biotech Stocks Facing FDA

Read More Here...

Sensex, Nifty Seen Flat To Higher At Open

Indian shares are seen opening higher on Tuesday, although underlying sentiment may remain cautious as investors grapple with worsening strains between Washington and Beijing as well as rising coronavirus cases both at home and abroad.

Over 68 percent of rural Indians were in a monetary crisis while 78 percent found work coming to a complete standstill due to the lockdown, a survey of 25,300 respondents from 23 states and union territories on the impact of the stringent lockdown in rural India found.

Benchmark indexes Sensex and the Nifty eked out modest gains on Monday while the rupee settled 3 paise higher at 74.90 against the U.S. dollar.

Asian markets rose this morning, the dollar held near a one-week high and oil extended gains to hover around $42 a barrel as New York, California and Texas reported a drop in coronavirus hospitalizations and investors assessed the progress in U.S. stimulus talks between Democrats and Republicans.

U.S. stocks ended mixed overnight as President Donald Trump signed executive orders aimed at extending coronavirus relief to Americans and Beijing announced it would sanction 11 U.S. citizens in response to similar measures from Washington.

The Dow Jones Industrial Average rallied 1.3 percent and the S&P 500 edged up 0.3 percent to reach their best closing levels in over five months, while the tech-heavy Nasdaq Composite index shed 0.4 percent.

European markets closed higher on Monday as investors reacted positively to last week’s encouraging data on U.S. jobs growth and signs of improvement in China’s industrial activity.

The pan European Stoxx 600 gained 0.3 percent. The German DAX inched up 0.1 percent, France’s CAC 40 index edged up 0.4 percent and the U.K.’s FTSE 100 added 0.3 percent.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Biotech Stocks Facing FDA

Read More Here...

S&P 500 ends up slightly, tech-related shares underperform value

Aug 10: The Dow jumped 1%, the S&P 500 inched up and the Nasdaq closed lower on Monday as investors extended a rotation into value stocks from heavyweight tech-related names while awaiting news on progress in a U.S. fiscal support bill.

The Nasdaq, which has been hitting record highs, was dragged lower by Microsoft Corp, Amazon.com Inc and Facebook Inc.

Value stocks, which tend to outperform growth coming out of a recession, have gotten a lift in recent days. The Russell 1000 value index rose 0.9% on Monday, while the Russell 1000 growth index fell 0.5%.

“Part of the reason the S&P 500 has been held back is we’re starting to see yet another rotation to value and away from growth,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago. “That tends to hold back the S&P because it’s so dominated by big tech.”

Similar rotations in recent years have not lasted long, he said, and, at this point, “I’m looking at this more as a correction of growth than it is people abandoning stocks.”

Bets on a potential coronavirus vaccine, historic fiscal and monetary support, and more recently, a better-than-expected second-quarter earnings season have brought the S&P 500 close to its February record closing high.

The Dow Jones Industrial Average rose 357.96 points, or 1.3%, to 27,791.44, the S&P 500 gained 9.19 points, or 0.27%, to 3,360.47 and the Nasdaq Composite dropped 42.63 points, or 0.39%, to 10,968.36.

Providing some support, U.S. President Donald Trump signed executive orders that partly restored enhanced unemployment benefits after talks between the White House and top Democrats in Congress about fresh stimulus broke down last week.

U.S. Treasury Secretary Steven Mnuchin, in an interview with CNBC on Monday, said the Trump administration and Congress could reach an agreement as soon as this week if Democrats are “reasonable.”

Energy and industrials,

Read More Here...

S&P 500 ends up slightly, tech-related shares underperform value

Aug 10: The Dow jumped 1%, the S&P 500 inched up and the Nasdaq closed lower on Monday as investors extended a rotation into value stocks from heavyweight tech-related names while awaiting news on progress in a U.S. fiscal support bill.

The Nasdaq, which has been hitting record highs, was dragged lower by Microsoft Corp, Amazon.com Inc and Facebook Inc.

Value stocks, which tend to outperform growth coming out of a recession, have gotten a lift in recent days. The Russell 1000 value index rose 0.9% on Monday, while the Russell 1000 growth index fell 0.5%.

“Part of the reason the S&P 500 has been held back is we’re starting to see yet another rotation to value and away from growth,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago. “That tends to hold back the S&P because it’s so dominated by big tech.”

Similar rotations in recent years have not lasted long, he said, and, at this point, “I’m looking at this more as a correction of growth than it is people abandoning stocks.”

Bets on a potential coronavirus vaccine, historic fiscal and monetary support, and more recently, a better-than-expected second-quarter earnings season have brought the S&P 500 close to its February record closing high.

The Dow Jones Industrial Average rose 357.96 points, or 1.3%, to 27,791.44, the S&P 500 gained 9.19 points, or 0.27%, to 3,360.47 and the Nasdaq Composite dropped 42.63 points, or 0.39%, to 10,968.36.

Providing some support, U.S. President Donald Trump signed executive orders that partly restored enhanced unemployment benefits after talks between the White House and top Democrats in Congress about fresh stimulus broke down last week.

U.S. Treasury Secretary Steven Mnuchin, in an interview with CNBC on Monday, said the Trump administration and Congress could reach an agreement as soon as this week if Democrats are “reasonable.”

Energy and industrials,

Read More Here...

S&P 500 ends up slightly, tech-related shares underperform value

Aug 10: The Dow jumped 1%, the S&P 500 inched up and the Nasdaq closed lower on Monday as investors extended a rotation into value stocks from heavyweight tech-related names while awaiting news on progress in a U.S. fiscal support bill.

The Nasdaq, which has been hitting record highs, was dragged lower by Microsoft Corp, Amazon.com Inc and Facebook Inc.

Value stocks, which tend to outperform growth coming out of a recession, have gotten a lift in recent days. The Russell 1000 value index rose 0.9% on Monday, while the Russell 1000 growth index fell 0.5%.

“Part of the reason the S&P 500 has been held back is we’re starting to see yet another rotation to value and away from growth,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago. “That tends to hold back the S&P because it’s so dominated by big tech.”

Similar rotations in recent years have not lasted long, he said, and, at this point, “I’m looking at this more as a correction of growth than it is people abandoning stocks.”

Bets on a potential coronavirus vaccine, historic fiscal and monetary support, and more recently, a better-than-expected second-quarter earnings season have brought the S&P 500 close to its February record closing high.

The Dow Jones Industrial Average rose 357.96 points, or 1.3%, to 27,791.44, the S&P 500 gained 9.19 points, or 0.27%, to 3,360.47 and the Nasdaq Composite dropped 42.63 points, or 0.39%, to 10,968.36.

Providing some support, U.S. President Donald Trump signed executive orders that partly restored enhanced unemployment benefits after talks between the White House and top Democrats in Congress about fresh stimulus broke down last week.

U.S. Treasury Secretary Steven Mnuchin, in an interview with CNBC on Monday, said the Trump administration and Congress could reach an agreement as soon as this week if Democrats are “reasonable.”

Energy and industrials,

Read More Here...