What matters this week
There was a mish-mash of geopolitical, political and economic data this week, including the announcement of a snap UK election, US upping the ante in the Middle East and North Korea, and Chinese economic growth. The latter has perhaps the most direct impact on Australia, with a small uptick in growth to 6.9% annualised in the first quarter of this year - better than expected, but cautioned by accuracy concerns in relation to the actual data, and also by ballooning debt levels.
Turning to Australian specific market news, gold miner Newcrest Mining had a 'seismic event' at its Cadia mine in NSW. A yet unspecified production impact will flow through to earnings, and thus the market marked the company down 4.6%.
TPG Telecom's share price also plunged on Tuesday. It fell 15.9%, after it recommenced trading following last week's announcement of a $1.9 billion splurge on mobile spectrum - to become Australia's fourth mobile carrier. The share price did partially recover later in the week. Longer term, one thinks Telstra's share price might be under the greater pressure.
The iron ore price continued its retreat this week, down 4.2% (and other commodities came under pressure to varying degrees too). The retreat over the last two months has not been unexpected given the oversupply situation understood to exist in China and the large fall in steel prices this month. The iron ore miners consequently had a bit of a tough week too - BHP Billiton -3.0%, Rio Tinto -1.0%, and the pure-play Fortescue Metals - 6.0%.
Many miners and energy companies released their quarterly production reports. Overall they were in line with expectations. There were some minor disappointments including from Rio Tinto and Fortescue, along with seasonal (rain) impacts which are quite usual for this time of year.
And finally, this week the gambling sector heated up further, with a consortium including the private equity player KKR making a takeover bid for Tatts. This is a direct threat to Tabcorp's proposal to create a gambling behemoth by merging with Tatts.