Week 17 Wrap: BHP-Anglo deal helps push down ASX; US data of concern but AI bulls happy

The Market Herald04-26

The biggest news of the week, as far as the ASX goes, quite rightly has something to do with the biggest company on our bourse – BHP (ASX:BHP), which is also the world’s largest miner. Over the ANZAC ...

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This would create a bona fide supermajor mining player, but clearly, not everybody was on board.At close on Friday, shares in BHP were down over -4% to hover around $43.30/sh. While ASX futures were already red following a poor night of US economic data – more on that in a second – a steep drop in BHP’s share price brought down the entire Australian share market.Google’s doing pretty well, and so is Meta, although Meta got slammed when it said its costs would raise in AI  Tesla was mixed, but the market liked hearing Tesla’s going to drop","collect":0,"end_time":0,"defaultTopTitle":"themarketonline.com.au","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0353189763.USD":"ALLSPRING  US ALL CAP GROWTH FUND \"I\" (USD) ACC","LU2063271972.USD":"富兰克林创新领域基金","LU0965509010.AUD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"AD\" (AUDHDG) INC","LU0082616367.USD":"摩根大通美国科技A（dist）","BK4168":"多种金属与采矿","BHP.AU":"BHP GROUP LTD","BK7507":"资源股","LU0061474705.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN \"AU\" (USD) ACC","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","BK4592":"伊斯兰概念","BK7511":"ESG概念","LU0158827948.USD":"ALLIANZ GLOBAL SUSTAINABILITY \"A\" (USD) INC","LU1814569148.SGD":"WELLINGTON GLOBAL QUALITY GROWTH \"D\" (SGDHDG) ACC","LU1852331112.SGD":"Blackrock World Technology Fund A2 SGD-H","LU0080751232.USD":"富达环球多元动力基金A","LU0965509283.SGD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"AD\" (SGDHDG) INC","LU0289960550.SGD":"AB FCP I - GLOBAL EQUITY BLEND PORTFOLIO 'A' (SGD) ACC","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","LU1861215975.USD":"贝莱德新一代科技基金 A2","LU1548497426.USD":"安联环球人工智能AT Acc","IE00BFSS8Q28.SGD":"Janus Henderson Balanced A Inc SGD-H","XAO.AU":"标普/澳交所 普通股指数","LU1861220033.SGD":"Blackrock Next Generation Technology A2 SGD-H","XJO.AU":"标普/澳交所 200指数","LU0354030511.USD":"ALLSPRING  U.S. LARGE CAP GROWTH \"I\" (USD) ACC","LU2602419157.SGD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"AC\" (SGD) ACC","XKO.AU":"标普/澳交所 300指数","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","LU0965509101.SGD":"AB LOW VOLATILITY EQUITY PORTFOLIO \"A\" (SGDHDG) ACC","LU0234572021.USD":"高盛美国核心股票组合Acc","IE0009356076.USD":"JANUS HENDERSON GLOBAL TECHNOLOGY AND INNOVATION \"A2\" (USD) ACC","LU1571399168.USD":"ALLSPRING GLOBAL LONG/SHORT EQUITY \"IP\" (USD) ACC","BK4077":"互动媒体与服务","LU0109391861.USD":"富兰克林美国机遇基金A Acc","GOOG":"谷歌","BHP":"必和必拓公司","IE0004445239.USD":"JANUS HENDERSON US FORTY \"A2\" (USD) ACC","LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","GOOGL":"谷歌A","LU0052756011.USD":"TEMPLETON GLOBAL BALANCED \"A\" (USD) INC","LU0889565833.HKD":"FRANKLIN TECHNOLOGY \"A\" (HKD) ACC","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","LU0786609619.USD":"高盛全球千禧一代股票组合Acc","LU0234570918.USD":"高盛全球核心股票组合Acc Close","LU0353189680.USD":"富国美国全盘成长基金Cl A Acc","LU1280957306.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQUITIES \"AUP\" (USD) INC","LU1914381329.SGD":"Allianz Best Styles Global Equity Cl ET Acc H2-SGD","IE00BKDWB100.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5H\" (SGDHDG) ACC","LU0128525689.USD":"TEMPLETON GLOBAL BALANCED \"A\"(USD) ACC","LU0820562030.AUD":"ALLIANZ INCOME AND GROWTH \"AMH2\" (AUDHDG) H2 INC"},"translate_title":"第17周总结：必和必拓——英美资源集团交易帮助压低ASX；美国数据令人担忧，但人工智能多头高兴","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BHP.AU":1,"BHP":1,"XKO.AU":0.9,"XJO.AU":0.9,"XAO.AU":0.9,"GOOGL":0.79,"GOOG":0.75},"content_text":"The biggest news of the week, as far as the ASX goes, quite rightly has something to do with the biggest company on our bourse – BHP (ASX:BHP), which is also the world’s largest miner.\nOver the ANZAC day break, we got international news that BHP is considering an A$60B deal with Anglo American to buy the latter out. This would create a bona fide supermajor mining player, but clearly, not everybody was on board.\nAt close on Friday, shares in BHP were down over -4% to hover around $43.30/sh. While ASX futures were already red following a poor night of US economic data – more on that in a second – a steep drop in BHP’s share price brought down the entire Australian share market.\nSome $554M worth of shares were traded in BHP on Friday, with share turnover 4M units higher than the four week average at 12.7M shares in BHP swapping hands. So what’s the problem?\nThe first thing to note is that BHP clarified on Friday the deal is basically a proposal. There is also the question of whether or not competition regulators would allow the deal to happen, which personally, I find hard to believe. \nAnglo American has stakes in projects all across Australia, and much like the proposed and now-abandoned Woodside-Santos merger of not-that-long-ago, there’s a few obstacles. Or perhaps a more correct way to put it is ‘concerns’ – and that’s not even considering regulator hostility. \nConsider that BHP profits hit a decade low earlier this year, and the company slashed its dividend. We’ve since learned our biggest miner is on the whole doing okay – a multibillion Nickel West writedown notwithstanding, about which we learn BHP’s ultimate decision around early FY25 – but a lot of positive sentiment is riding on higher copper prices, up nearly +15% MoM. \nIf I had to guess, I would imagine BHP shareholders are asking themselves: is this the right thing to do right now? In fairness, BHP has reiterated it’s a proposed deal with no guarantee. One to watch – but if it goes through, expect it to be the biggest ASX deal of the year.\nWorth noting is that we also got Oz inflation data higher than expected this week at +3.6%, but, the market didn’t really pay too much attention either way. \nMore disappointing US data \nTrying not to be too much of a doomer, I’ll preface this next section by noting we get fresh monthly US PCE inflation data this evening Australian time, and if that’s better than the market expects, we could see the Friday scaries we’ve witnessed today halfway forgotten by Monday. \nThere’s also the consideration that we’ve seen more than one Mag7 tech company drop earnings on the US market this week, and on the whole, things are more or less steady for the big tech sector basically in control of US market sentiment right now.\nGoogle’s doing pretty well, and so is Meta, although Meta got slammed when it said its costs would raise in AI (people are probably wondering where the hell the Metaverse went.) Tesla was mixed, but the market liked hearing Tesla’s going to drop prices further to compete with Chinese companies like BYD, with which Tesla is currently engaged in a price war (at the same time Biden ratchets up trade war tensions, in a move which feels a little bit Trumpish.)\nSo what’s this “disappointing US data” I speak of? \nIn short: softer than expected GDP growth, as well as quarterly PCE data higher than expected (opposed to the monthly PCE data we get this evening.) Depending on where you get your information, analyst expectations for US Q1 GDP growth ranged anywhere from around +2.5% QoQ to +3% QoQ. Instead, we got a read of 1.6%. Meanwhile, Q1 PCE inflation increased by an annualised 3.7%. \nDiffering opinions \nThe finance world was unanimous in noting one thing – Q1 GDP was going down, while Q1 PCE inflation was going up. Long story short: interest rates more likely to be higher for longer. Cue a huge blow to morale in the US overnight (and thus, the world.)\nThis was enough to spook ASX futures traders, but as at 4.20pm AEDT, US market futures are all in the green per CNBC on Friday arvo Australia time (except for the Russell Smallcap index.) \nBut what to make of the GDP data varies depending on who you ask. \nGlobal X ETF’s head of investment strategy Scott Helfstein said the growth numbers were less concerning than inflation – noting we can expect a revised GDP read in May, next month. Despite caution, however, Helfstein wasn’t entirely bearish.\n“There is a different story on year-over-year basis where GDP growth was basically in line at 3.0%. This suggests that the economy remains relatively healthy, even thought that has not been the headline,” Helfstein said.\n“We should focus on this metric,” he added.\nSo what should we expect for Monday? That’s easy: watch what happens in the US tonight. And then make sure commodities don’t do anything crazy all weekend. And hope for world peace, but not too much peace all at once – actually, don’t look away from your phone at any moment. Or just let me do that for you, whatever. \nSee you Week 18. \nHeadlines that caught my eye this week:\nAustralian Economy \n\nAustralian inflation comes in higher than expected at +3.6% \nAustralian PPI prices increase 0.9%\nRabobank analyst Ben Picton has warned the RBA may not cut in 2024 per ANZ call\n\nInternational Economy \n\nHigher-than-expected inflation and lower-than-expected US GDP growth hurt sentiment \nMid-late April US jobless claims below expectations at 207K vs forecasts of 214K\nBank of Japan holds interest rates on hold, sending bond yields lower \n\nAustralian Equities\n\nBHP sinks over -4% on Friday after reports of proposed Anglo American buyout surface\nAustralian Strategic Materials looking at possible A$1.5B funding pool for Dubbo REE play\nRelatively quiet Base Resources suddenly spikes on US Energy Fuels buyout offer\n\nInternational Equities (Mag7 Special)\n\nMeta sinks despite fairly positive fundamentals on AI cost hike warning\nGoogle owner Alphabet issues its first dividend on strong earnings \nMicrosoft profits jump 20% YoY to US$21.9B\nDespite midweek positive rebound, Tesla still among worst S&P500 stocks YTD","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2430521019"}