Wall Street grinds higher, ASX set to rise

The laggards

Las Vegas-headquartered gambling company Light & Wonder was among the poorest performers, with its shares slumping 6 per cent, despite the company reporting strong first-quarter results that an E&P Capital analyst described as “solid and marginally above expectations”.

Credit Corp Group shares also fell 4.8 per cent.

Shares in location technology company Life360 dipped 2.5 per cent as investors who were expecting an uplift to earnings guidance were disappointed.

The lowdown

Metcash’s Independent Hardware Group has begun a hunt for a new chief executive after the company revealed its boss Annette Welsh would be stepping down and instead taking on a corporate strategy and governance role.

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The hardware business’ general manager of merchandise, Geoff Harris, will step in as interim CEO. Metcash shares dropped1 per cent.

Except for Thursday, the benchmark ASX 200 rose for most of this week, finishing 1.6 per cent higher.

“Shares have had a nice rebound from their falls in April, but the ride is likely to remain more volatile and constrained than we saw in the first three months of the year,” AMP chief economist Shane Oliver wrote in a research note to clients.

“Uncertainty remains regarding the outlook for interest rate cuts and geopolitical risks around the Israel/Iran conflict and US election are high,” he said.

“However, we continue to see further gains in shares this year, as disinflation resumes, central banks cut rates and recession is avoided or proves mild.”

The Reserve Bank held interest rates steady at 4.35 per cent this week, but Oliver noted its language had become more hawkish.

The federal budget will be released on Tuesday. “Key things to watch apart from inflation are whether the budget adds extra net stimulus to the economy,” Oliver wrote.

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Overnight on Wall Street, the S&P 500 Index added 0.5 per cent, the Dow Jones Industrial Average gained 0.8 per cent and the Nasdaq Composite Index advanced 0.3 per cent. The S&P 500 is now withing touching distance of its late-March record and has soared more than 18 per cent in the past six months.

An economic report showing a pick-up in worker layoffs helped to support the Wall Street benchmark.

The number of workers applying for unemployment benefits rose by more last week than economists expected. That could be a sign the US economy can pull off a hoped-for balancing act of staying solid enough to avoid a recession, but not so strong that it puts upward pressure on inflation.

Treasury yields erased early gains after the report’s release, an indication of expectations for the US Federal Reserve to deliver long-sought cuts to interest rates later this year.

The yield on the 10-year Treasury eased to 4.45 per cent, from 4.5 per cent late on Wednesday. The two-year yield, which more closely tracks expectations for the Fed, slipped to 4.81 per cent, from 4.84 per cent.

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